Markets

Akeem ReachnaijaMay 21, 2019
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7min210

The attention of The Nigerian Stock Exchange (NSE or The Exchange) has been drawn to a few critical issues raised in various print and social media platforms regarding the listing of MTN Nigeria Communications Plc (MTN Nigeria) on the Premium Board of the Exchange. As an Exchange that is committed to operating a fair, orderly and transparent market, we deem it important to clarify these issues.

Paucity of MTN Shares on the Floor

MTN Nigeria Listed by Introduction. Where a company lists following an Initial Public Offering, shares are expected to be available for trading on the day of listing. In a Listing by Introduction, however, no shares have been offered for subscription by the company prior to listing. Thus, without any intervention, it is possible that there will be no shares available for trading on the listing date. Indeed, currently, no rule of The Exchange compels shareholders in a listed company to tender their shares for trading. Shareholders are at liberty to trade their shares at any time and price suitable to them. Thus, in order to stimulate trading in the shares of companies that List by Introduction, the NSE’s practice is to urge the company to make shares available on the day of listing. In the case of MTN Nigeria, the NSE used and will continue to use moral suasion to get MTN Nigeria to make available shares daily, pending its Initial Public Offer.

Since the listing of MTN Nigeria on Thursday, May 16, 2019, a total of 105,301,759 shares valued at N12,231,997,316 have traded in three days. These trades were carried out by ten (10) dealing member firms in 134 cross deals/negotiated deals. According to the rule book of the Exchange, “When a Dealing Member or Authorized Clerk has an order to buy and an order to sell the same security at the same price, the Dealing Member or Authorized Clerk may “cross” those orders at a price at or within The Exchange best bid or offer”. A variant of this is the negotiated deal, which describes a situation where a cross-deal is executed between two dealing member firms at a price which may be within the Exchange’s best bid or offer or with the approval of the Exchange, outside the best bid or offer. Because cross deals involve clients of the same stockbroker on both sides of a trade, significant issues have been raised about the fact that stockbrokers who have not been involved in the cross deals have not been able to trade on behalf of their clients. The Exchange is not unconcerned about this state of affairs.

As an Exchange that champions transparency and equity for all stakeholders in our market, we have received stakeholder feedback concerning our present rules on cross dealing and will consider the issues raised as part of our sustained efforts to ensure our market remains equitable for all stakeholders.

MTN Nigeria’s Free-Float Valuation

There appears to be a misconception that a concession was given to MTN Nigeria on the minimum free float required for companies listed on The Exchange. According to the Rules Governing Free Float Requirements for Issuers Listed on The Nigerian Stock Exchange, free float is defined as the number of shares that an Issuer has outstanding and available to be traded on The Exchange. It includes all shares held by the investing public, and excludes shares held directly or indirectly by promoters, directors and their close relatives; strategic investors holding five per cent (5%) and above of the issued share capital; or government.

The Exchange’s rules for listing on the Premium Board (which is the board in which MTN Nigeria is listed) require a Company to have a minimum free float of twenty per cent of its issued share capital or that the value of its free float is equal to or above N40 billion on the date the Exchange receives the Issuer’s application to list. MTN Nigeria met with the free float requirement of N40 billion. The free float of MTN at the time of listing was in excess of N160 billion.

Investor protection is very important to us at the NSE and we have taken necessary steps to ensure that our market is fair and orderly. In 2016, we acquired NASDAQ’s SMARTS platform to proactively detect and deter manipulative tendencies, gather intelligence and execute risk-based supervision of flagged participants. We have also implemented other initiatives aimed at providing investors with timely information on the compliance status of our dealing members and issuers including BrokerTrax, our member compliance report, and Compliance Status Indicator (CSI) codes (for issuers). In addition, we have institutionalized our investor education program and launched X-Academy in June 2017, because we have identified investor education as a veritable tool to galvanizing informed investments and necessary step towards protecting investors in our market.

Whilst we believe we have addressed the concerns raised, we will like to assure our stakeholders and the general public that The Exchange will continue to uphold global best practices in its business operations and will sustain engagement with its stakeholders to continually develop regulatory frameworks that ensure our market completely reflects our values of ambition, fairness and inclusion.​


Akeem ReachnaijaMay 17, 2019
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2min240

The Nigerian Stock Exchange (NSE) opens the week tradings’ on a  bearish note. The All Share-Index (ASI) declined by 1.26% to close at 28,484.44 basis points. Year-to-Date the ASI was down by 9.37%.

The equity market capitalization closed at N10.701 trillion in contrast to N10.842 trillion recorded last week Friday. The market breadth closed with 11 gainers and 30 losers. Okomu Oil led the gainers’ chart while NEM Insurance Plc led the top losers’ chart.

United Capital Plc was the most traded stock by volume. The stock sold 41.2 million units of its shares valued at N289.1 million. Guaranty Trust Bank was the most traded stock by volume. The company sold 37.9 million shares valued at N1.1 billion.

UBA sold 15.9 million units worth N96.8 million. Sterling Bank transacted 13 million units valued at N34.4 million. Transnational corporations of Nigeria ranked in 12.2 million units valued at N14.2 million.

Okomu Oil Palm Company Plc was the best-performed stock for the day. The stock appreciated by 10% to close at N77. Neimeth International Pharmaceuticals plc also appreciated by 10% to close at 55 Kobo.

AG Leventis Nigeria Plc was up by 8.33% to close at 26 Kobo. Africa Prudential Plc appreciated by 7.91% to close at N3.82. Japaul Oil completes the top five gainers for the day. The stock increased by 7.69% to close at 28 Kobo.

NEM Insurance Plc was the worst performed stock for the day. The stock shed 10% to close at N2.25. Chams Plc also depreciated by 10% to close at 36 Kobo. United Capital Plc was down by 9.37% to close at N2.32.

Goldlink Insurance Plc declined by 8.70% to close at 21 Kobo. Jaiz Bank Plc rounds up the top five losers chart. The stock went down by 8% to close at 46 Kobo.


Akeem ReachnaijaMay 17, 2019
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2min240

Cement Company of Northern Nigeria (CCNN) has announced its first quarter 2019 unaudited financial results for the period ended 31st March 2019.

The company grew its revenue from N5.39 to N16.89 billion. Year-on-Year this shows a performance growth of 213.36% for the period ended. The company’s cost of sales surged from N3.1 billion to N9.1 billion.

Business Hour Nigeria reports that CCNN gross profit appreciated from N2.2 billion to N7.6 billion. This shows Year-on-Year gross profit growth of 245.5%. Whilst the company’s other income grew from N116.8 million to N2.1 billion.

The company grew its Profit Before Tax (PBT) from N1.5 billion to N5.3 billion. This shows PBT growth of  253.3% on Year-on-Year performance basis. Cement Company of Northern Nigeria reported Profit After Tax (PAT) of N3.6 for the period ended. The company grew its PAT from N1.1 billion in Q1 2018 to N3.6 billion in Q1 2019. Year-on-Year the company’s PAT was up by 227.3%.

However, the company’s Earnings Per Share (EPS) declined by 58 Kobo per share. The company’s Earnings Per Share declined from 86 Kobo to 28 Kobo. Year-on-Year CCNN EPS was down by 67.4%.

The selling and distribution expenses soared from N245.87 million to N1 billion. Whilst its administrative expenses increased from N597.65 million to N1.29 billion.


Akeem ReachnaijaApril 24, 2019
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1min670

Cocoa Association of Nigeria (CAN) has called for the need to include pure cocoa drink into the school feeding programme of the Federal Government.

The newly elected Ondo state chairman of the Association, Dr Akinola Adeboye made the call in his acceptance speech after the election of the association in Akure, Ondo state.

Adeboye described cocoa drink as containing the best nutrient calling on Nigerians to take interest in its consumption which he said should be consumed from what is produced.

The chairman who was sworn in by the National President of the Association represented by Evangelist Joshua Oyedele vowed to change the regrettable position the association finds itself stressing that the state produces lesser than what it produces before.

Adeboye, who is a retired director of produce promised to affect value chains of the produce through international partners

Other elected Officers include Mr.Olofinshawe Isaiah as Vice -Chairman, IBITOYE Ezekiel, Secretary and Olufemi Falayi as Treasurer among others.

The election was conducted in a bid to reclaim the lost glory as the best producer of Cocoa in Nigeria.


Akeem ReachnaijaApril 10, 2019
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1min480

The naira yesterday appreciated to N360.55 per dollar in the Investors and Exporters (I&E) window even as the Central Bank of Nigeria (CBN) injected N210 million into the inter-bank foreign exchange market.

Figures obtained from the CBN yesterday showed that authorized dealers in the wholesale segment of the market received $100 million, while the Small and Medium Enterprises (SMEs) segment and customers requiring foreign exchange for invisibles were allocated $55 million each.

A statement by the apex bank’s spokesman, Mr. Isaac Okorafor reiterated the CBN’s commitment to continue to boost interbank foreign exchange market to ensure liquidity and stability in the market. Data from FMDQ showed that the indicative exchange rate for the I&E window dropped to N360.55 per dollar from N360.68 per dollar on Monday, translating to 13 kobo appreciation for the naira.

The volume of dollars (turnover) traded yesterday dropped by 50 percent to $132.88 million from $88.79million sold on Monday. The naira, however, was stable at N358.7 in the parallel market.


Akeem ReachnaijaApril 10, 2019
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2min570

Transactions on the floor of the Nigerian Stock Exchange (NSE) Tuesday continued on downward trend, dropping by N5 billion.

Specifically, market capitalisation of listed equities declined further by 0.05 per cent to N10.948 trillion from N11.953 trillion reported on Monday.

Also the NSE All Share Index depreciated by 12.78 basis points to 29149.46 points from 29162.24 points traded the previous day.

Investors traded a turnover of 374.026 million shares worth N3.057 billion in 3634 deals, against 455.875 million shares valued at N5.254 billion exchanged hands the previous day in 3993 deals.

According to NSE trading result during the day, Stanbic IBTC led gainers table, increasing by N2.80 kobo to close at N46.00, Guaranty Trust Bank followed with a gain of N2.45 kobo to close at N34.00, Nigerian Breweries gained N0.20 kobo to close at N60.20 kobo, Access Bank added N0.10 kobo to close at N5.70 kobo, May and Baker Nigeria Plc grew by N0.08 kobo to close at N2.38 kobo.

On the contrary, Nascon recorded the highest loss during the day, dropping by N0.95 kobo to close at N19.05 kobo, Ecobank Transnational Incorporated trailed with a loss of N0.75 kobo to close at N10.50 kobo, Dangote Cement industry Plc fell by N0.50 kobo to close at N185.00, Dangote Sugar Refinery Nigeria Plc sheds N0.30 kobo to close at N13.45 kobo, NEM Insurance down by N0.23 kobo to close at N2.10 kobo.

A review of the investment showed that Sterling Bank Plc was the investors delight during the day, accounting for 119.718 million shares worth N311.311 million, Chams Plc followed with 50.233 million shares valued at N14.060 million, FBNHoldings traded 44.585 million shares cost N323.135 million, United Bank for Africa exchanged 26.934 million shares worth N161.941 million while Guaranty Trust Bank sold 24.072 million shares valued N787.990 million.


Akeem ReachnaijaApril 9, 2019
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4min350

Continued price losses by many blue-chip stocks, yesterday depressed the indices further as transactions on the Nigerian Stock Exchange (NSE) reopened on a downturn making the All-share index plunge by 1.53 per cent. Yesterday, the All -share index (ASI) shed 454.14 absolute points, representing a dip of 1.53 per cent to close at 30,226.77 points. Similarly, the market capitalisation depreciated by N170 billion to close at N10.954 trillion.

Yesterday’s performance was influenced by price depreciation in medium and large capitalised stocks, among which are, Dangote Cement, Stanbic IBTC Holdings, Guinness Nigeria, Guaranty Trust Bank and Union Bank of Nigeria (UBN).Analysts at Afrinvest Limited said: “Despite the overall negative performance last week, we observed increased buying activity on bellwether stocks, and we expect this trend to be sustained this week as investors seek to take position in attractively priced stocks”.

Investdata Research Consulting Limited said: “With the prices of major blue chips stocks continuing to drop in recent weeks, we expect speculative trading to shape the market’s direction in the next trading week despite the seeming negative outlook.

“The volatility witnessed last week, was driven by traders and investors repositioning ahead of dividend declaration by major listed companies. The ongoing volatility will continued as investors and fund managers rebalance their portfolios. “With eyes fixed on the political space and ongoing full year company earnings and post-election market dynamics, investors should review their positions in line with their investment goals, strength of company numbers and act as events unfold in the global and domestic.”

However, in the absence of major triggers that could drive positive sentiments, we maintain a bearish near-term outlook.”
Market breadth remained negative with 13 gainers against 30 losers. Mutual Benefit Assurance recorded the highest price gain of 10 per cent, to close at 22 kobo, per share.

Neimeth International Pharmaceuticals followed with a gain of 9.80 per cent, to close at 56 kobo, while Learn Africa rose by 8.94 per cent to close at N1.34, per share. Chams appreciated by 8.33 per cent to close at 26 kobo per share.

Eterna went up by 6.25 per cent to close at N4.25, per share. On the other hand, Fidson Healthcare led the losers’ chart by 10 per cent, to close at N4.05, per share. Tripple Gee and Company followed with a decline 9.09 per cent to close at 70 kobo per share.

NPF Microfinance Bank declined by 8.72 per cent to close at N1.36, per share.
Consolidated Hallmark Insurance declined by 7.41 per cent to close at 25 kobo, while McNichols down by 7.35 per cent, to close at 63 kobo, per share.

However, total volume traded went up by 13.63 per cent to 455.88 billion units, valued at N5.26 billion, and exchanged in 3,993 deals. Sterling Bank traded with 93.42 million shares valued at N242.19 million. Guaranty Trust Bank followed with 78.33 million shares worth N2.66 billion, while Triple Gee and Company traded 60 million shares valued at N42 million.
Zenith Bank traded 26.64 million shares valued at N540.69 million, while Access Bank transacted 24.89 million shares worth N140.1 million.


Akeem ReachnaijaApril 7, 2019
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2min430

Aliko Dangote, Africa’s richest man who spoke at Mo Ibrahim governance weekend ongoing in Abidjan, disclosed that he once withdrew $10m just to look at it.The Billionaire who disclosed that he knew he was rich on paper but had to convince himself that he was indeed rich, said he drove to a bank, withdrew $10 million, took it home, put it on his bed, looked at it, and returned it back to the bank the following day.

“The way it is that when you first start business, your target is to make your first million. Fine, I did that,” Dangote told Mo Ibrahim.

“After a year or so, I realised that I had much more, and I said ok, fine, all these numbers are just written numbers. One day I went to a bank, and at that time, there were no restrictions, and I wrote a cheque and cashed $10m from the bank and put it in the boot of my vehicle, and I went home and I opened it and I looked at $10m and I said ‘now I believe I have money’.”

Here is the video below;

https://www.youtube.com/watch?v=Z2nGCjDY3TM

 


Akeem ReachnaijaApril 5, 2019
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2min750

The bearish performance of the Nigerian equities market continued into the fourth consecutive trading session yesterday on the back of losses in Dangote Cement, ETI and Access Bank.

As a result, the All-Share Index (ASI) fell by 0.39 per cent to 29,553.12 points as Year-to-Date loss worsened to -6.0per cent, while market capitalisation fell by N43.4 billion to N11.100 trillion.

At the sound of the closing gong, activity level worsened as volume and value traded dipped by 8.1 per cent and 48.9 per cent to 499.08 million units and N2.89 billion respectively, exchanged in 4,133 deals.

Across sectors, performance was largely bearish as 4 of 5 indices closed in the red. The Insurance Index declined the most, down 2.5 per cent as losses in Regal Insurance (-8.0 per cent) dragged the Index, while the Industrial Goods Index trailed, inching southward by 0.5 per cent following price depreciation in CAP (-9.89 per cent). Similarly, the Consumer Goods and Banking indices fell 0.4 per cent apiece due to sell-offs in Dangote Cement (-3.17 per cent) and Access Bank (-4.27 per cent). On the flip side, the Oil and Gas Index extended its gains into another trading session following sustained buying interest in Forte Oil (+9.9 per cent).

Investors sentiment as measured by market breadth (advance/decline ratio) strengthened to 0.6x from yesterday’s 0.3x as 11 stocks advanced relative to 19 stocks that declined. The top performing stocks were CHAMS (+10.0 per cent), Forte Oil (+9.8 per cent) and Vitafoam (+7.8 per cent) while the least performing stocks for the day were CAP (-9.9 per cent), Unity Bank (-9.3 per cent) and Eterna (-8.0 per cent). Reacting, analysts at Afrinvest said, “We do not expect this negative performance to persist in the final trading session of the week as we anticipate that investors will take advantage of the attractively priced stocks”.


Akeem ReachnaijaApril 5, 2019
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6min670

The Central Bank of Nigeria (CBN) and banks, under the aegis of the Bankers’ Committee, Thursday said they have resolved to commence the disbursement of single-digit loans to the creative industry, some targeted cash crops, as well as to intensify their support for other operators in the non-oil sector.

The amount to be disbursed to operators in these sectors was put at N200 billion.
This is just as the committee reiterated that despite the concerns about the recently held general election, the country recorded foreign portfolio inflows (FPIs) of $6 billion in the first quarter of 2019.

The Director, Banking Supervision Department, CBN, Mr. Ahmed Abdullahi, said this Thursday at a media briefing at the end of the Bankers’ Committee meeting in Lagos.

Speaking on the increased FPIs inflows, Abdullahi said: “The Bankers’ Committee noted that lending to the private sector and the economy has increased and that is very positive news. Also confidence by portfolio investors has also increased. Between January and March despite the issue of the elections, $6 billion came in and that is positive news.”

Also, the Group Managing Director/Chief Executive of Access Bank, Herbert Wigwe, while speaking to journalists, said the committee would commence disbursement of funds for the creative industry.

According to him, the committee revisited the entitle value chain of music, movies, information technology and fashion, right from production facilities to capacity building, to ensure that whatever is produced is world-class.

“At the Bankers Committee, we got the approval to take it to the next level, which is simply to do a final presentation and share it with the market and how it’s going to happen. So by next week there will be announcement for people who want to participate in each of these segments.

“The specific amount will depend on which of the strata you fall into and what you are doing. The loans are for a maximum of 10 years, they are single-digit interest rate loans and reflective of the fact that in these industries, what you require is long term financing at single-digit; while we will ask for collateral it will be flexible,” Wigwe added.

On his part, the Managing Director of the United Bank for Africa Plc (UBA), Mr. Kennedy Uzoka, who spoke on the resolutions of the committee to enhance support for the real sector said: “The committee believes that we really haven’t made so much progress in this direction and subsequent to that, the committee set up a sub-committee and the sub-committee of members are those who have operated in continents where export have done very well. We have seen some countries that have similar products and have excelled in exporting while we have dropped.

“So, the question is, what are these countries doing that we are not doing? What are those things that are challenging us as a nation to diversify our economy from the standpoint of exports?”

He further added: “We interrogated this and worked with the different agencies of government across the continent and also we came back home to check what they have and we found out that indeed we have a lot of policies, but the challenge have been execution and we narrowed this down to seven broad areas.

“Typically, finance is one of the major challenges; we have policies, logistics -our ports don’t open weekends- and in terms of the policies that drive exports, we believe that a lot of them need to be changed.”

Alluding to the fact that funding was a major challenge, he said the committee resolved to focus on crops with near-term benefits.

He added: “Fortunately, CBN has different types of funds, so we looked at the existing funds so we don’t reinvent the wheel and so we looked at which of the funding can address the current challenges. We looked at some products with viability for export, and how it would help export, address employment issues, create necessary economic activities and create relieve in terms of foreign exchange.

“That is because if we add value to a commodity, we would create employment and that would save us foreign exchange, as against what we do today that most of our products are exported in raw forms. And we believe that with a little push, we can add a lot more value.”

He said the committee agreed to immediately focus on oil palm, cocoa, sesame seed and of course shea and cashew. “Based on the meeting we had today, we are going to be lending at single-digit, up to a maximum of 10 years and we are going to devote N200 billion to support this and that would change the narrative for export.”