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Financial Statistics as of 25-05-2017
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The Nigerian Stock Exchange market capitalisation advanced by N54bn to close at N9.552tn from N9.496tn at the close of trading on the Exchange’s floor on Monday.
The market opened the week in gains rising by 0.60 per cent following advances in key sectors.
The NSE All-Share Index also appreciated to 27,812.06 basis points from 27,650.32 basis point recorded on Friday last week.
The financial services and consumer goods sectors recorded gains on the back of advances in Guaranty Trust Bank Plc (1.58 per cent gain), FBN Holdings Plc (0.97 per cent gain), Nigerian Breweries Plc (1.44 per cent gain) and Nestle Nigeria Plc (1.21 per cent gain).
The oil and gas sector also closed higher following gains in Forte Oil Plc (1.19 per cent gain) and Oando Plc (0.78 per cent gain). The industrial goods sector however remained unchanged.
Market breadth remained positive with 25 advances and 14 declines.
Analysts at Vetiva Capital Management Limited, therefore, said, “Going by Monday’s gains and the sustained market breadth, we think market sentiment remains quite positive ahead of the next session.”
Fidelity Bank Nigeria Plc has stayed afloat by remaining profitable despite grim economic conditions following the sharp and elongated decline in oil price as the lender is aggressive about lending.
Fidelity recorded significant stride in interest on loans and advances while contemporaneously pursing the strategic objective of adding value to shareholder’s wealth as net interest income increased by 17.09 percent to N31.62 billion in the first half of the year, from N26.84 billion, last year.
Net interest income and similar charges grew by 2.03 percent to N57.16 billion in June 2016 as against N56.02 billion as at June 2015. Interest on deposits fell by 12.50 percent to N25.53 billion in June 2016, which means the bank is efficient in managing its funding costs.
Despite a slowing growing economy crimping the growth potentials of lenders, Fidelity recorded a profit after tax of N5.58 billion, lower than the N8.21 billion recorded the previous year.
Fidelity is not the only financial institution in Nigeria navigating the stormy sea as four out of 8 lenders that have released half year results fell off the cliff given lower profits.
The sudden drop in oil price by more than 50 percent since 2015 and dwindling government revenue have culminated in rising non performing loans and spiraling loan loss expense as major oil companies defaulted on loans.
Many lenders had to recognize irrecoverable debts as impairments, a situation which resulted in huge loan loss expense.
Analysts fret that with a GDP contraction of 1.8 percent in the first quarter of the year, rising inflation (16.50 percent), rising job losses in the private sector, unpaid salaries in the public sector and naira devaluation by 30 percent, will all conspire to weaken asset quality in other areas.
“We think the sectors that could see the most deterioration include general commerce, individual/consumer lending, manufacturing and construction/real estate,” said Adesoji Solanke, former analyst with Renaissance Capital Limited, in a recent note to BusinessDay.
Analysts however say there is light at the end of the tunnel as the full implementation of the 2016 budget will help stimulate the economy and reinvigorate banks as government seeks to spend it way out of a recession.
The International Monetary Fund (IMF) said the economy may contract by a further 1.80 percent by the end 2016.
Government has proposed a N6.1 trillion, a fiscal plan that may soften the downturn. The country intends to borrow N2.2 trillion to help bridge the budget gap.
A cursory look at the financial statement of Fidelity shows loans to deposit ratio moved to 85.68 percent in June 2016 as against 71.91 percent in June 2015. This means the lender is aggressive about lending.
Loans and advances were up by 24.14 percent to N711.14 billion while deposits from customers moved to 4.18 percent to N829.92 billion.
There is light at the of the tunnel for Nigerian Banks since analysts expect the adoption of a flexible exchange system will culminate in FX gains and higher returns on government securities.
Fidelity has N31 billion in market capitalization while shares outstanding stood at N28.97 billion.
Naira yesterday appreciated in value against the dollar at the interbank foreign exchange market following improved liquidity, currency dealers say.
It gained N3.25k against the dollar as it closed at N315.66k yesterday, representing 1.02 percent fall compared with N318.91k on Friday last week, data from FMDQ revealed.
At the parallel market, it closed at N395/$ the same as Friday last week, BusinessDay findings show.
Bureau De Change (BDC) operators could not get dollar supply from banks yesterday as they were turned off as a result of Know Your Customer (KYC) issue.
Aminu Gwadebe, president, Association of Bureau De Change Operators of Nigeria (ABCON), was optimistic that banks were going to sell dollar to BDC that had funded their accounts.
He discloses that the CBN was already talking with the banks to comply with its directive on dollar sale to BDCs.
The CBN had in a circular signed by Gotring W. D, acting director, trade and exchange department, directed authorised dealers who are agents of approved international money transfers operators to sell foreign currency accruing from inward money remittances to licensed BDCs with immediate effect.
Nigeria’s sugar producer, Dangote Sugar Refinery, has announced a profit before tax of N11.1bn for the six months ended June 30, 2016.
According to a statement from the firm, the unaudited results for the half year indicated that all performance measurement indices trended upwards, adding that profit before tax rose by 13.3 per cent compared to N9.8bn in the same period in 2015.
The statement read in part, “The sugar group recorded a profit after tax of N7.4bn, which rose by 17.5 per cent over N6.3bn posted in the corresponding period in 2015.
“Group revenue increased by 37.86 per cent to 70.5bn compared to 51.1bn in 2015, reflecting the increase in sales volumes during the period.
“Gross profit increased by 9.57 per cent to N13.9bn in contrast to N12.7bn despite higher production costs.”
The statement quoted the Acting Group Managing Director of the company, Abdullahi Sule, as saying that despite market challenges experienced in the first quarter and operating challenges in the second quarter of 2015, the firm was able to grow its revenue compared to the same period in the previous year.
He said, “Our focus for the remainder of the year will be to increase sugar production at reduced conversion cost and improve distribution to match the increasing demand from our customers.”
The decision by the Central Bank of Nigeria (CBN) to move towards a full free float of the naira, coupled with its roadshow in the United Kingdom and United States of America last month, is gradually yielding results as there was a perceptible improvement in liquidity on the interbank spot FX market last week, recording a turnover of $196.14 million, with an average daily volume of $39.23 million between July 25 and 29.
Market analysts who spoke to THISDAY on the development, confirmed that the improvement in turnover signalled growing liquidity in the official FX market on the back of growing investor confidence.
One bank treasurer, who preferred not to be named, said the average rate of the naira during five days of trading last week stood at N318.81 to the dollar, adding: “It is noteworthy that the CBN’s contribution to the market was only three per cent of the total volume that was traded.”
Yesterday, the naira exchange rate appreciated marginally on the interbank market to N316.37 to the dollar, stronger than the N321.16 at which it closed last Friday.
Indeed, analysts said they expected the naira to make more gains against the dollar on the interbank market, as bureau de change operators prepare to start trading FX in the next few days. However, on the parallel market, the naira depreciated to N381 to a dollar at the close of business yesterday, down from the N378 to a dollar last Friday.
A CBN top official, who also confirmed that there was a gradual improvement in market liquidity, attributed it to the decision by the central bank to truly float the currency, as well as the roadshow in the UK and US, saying both helped to restore confidence among some investors who had been sitting on the sidelines.
Lending more insight into the roadshow, he said the CBN governor, Godwin Emefiele, and his team met with over 140 investors in London, 10 in Los Angeles, about 50 in Boston and close to 90 in New York, where they were “all enthusiastic to receive the governor and other members of his team, given their interest in Nigeria”.
“With the clarity provided, they were more amenable and willing to resume trading in naira in a few weeks or months from now.
“Some of them are already undertaking market risk evaluations on making forays in our market, which is indicative of increasing interest in Nigerian bonds and other instruments,” he said. He also revealed that this was already evident in the OTC FX futures contracts which had already attracted $300 million-$400 million since trading on FX futures started about a month ago.
Another investment analyst who works for a foreign investment firm in the country also described recent events on the interbank FX market as a positive sign of things to come as long as “the central bank continues to do the right thing”.
He said: “With the hike in the MPR last week and other measures taken to date, we are aware that foreign investors who had been on the sidelines have started to get approvals to start trading in naira.
“However, the CBN should be ready to intervene in the market in the event of any shock, and clear any backlog of forex demand in the market to continue to rebuild confidence.
“Also, it should ensure that there is no preferential treatment of any investor; in other words, access to the market must be fairly uniform across the board for all investors.”
He, however, acknowledged that most of the issues had been addressed with the implementation of a single FX market, but cautioned that the central bank would still need to work towards improving reporting by Nigerian banks with respect to their exposure to oil and gas sector loans.
“Concerns still remain over banks’ exposure to the oil and gas sector, so the CBN needs to undertake a stress test and publish its findings like the European central bank.
“This should not be seen as a punitive measure, but as way of enhancing transparency on the financial stability of Nigerian banks through which investors move their funds.
“The absence of clarity on the standing of banks could also deter investors, so it is high time the CBN begins to publish the findings of its stress tests to eliminate any uncertainty that may remain in the market,” he explained.
He further added that the only major obstacle left for the full removal of capital controls remained the continuing ban on 41 items from accessing the interbank FX market, which he blamed for the wide disparity between the parallel and official market rates.
“For the CBN to achieve convergence, it needs to lift the ban on the 41 items, as this is not a monetary policy issue. Instead, the fiscal authorities should be allowed to step in by imposing measures to discourage the importation of these items through higher import duties and other measures that would encourage local manufacturers to produce the items locally.
“As long as the central banks retains the restriction, the wide disparity between the interbank and parallel markets will remain, so if it wants to achieve convergence, it must rethink its policy,” he said.
Weekly activities on the Nigerian Stock Exchange (NSE) opened on a positive note on Monday with the market capitalisation appreciating by N22 billion.
The market capitalisation, which opened at N10.367 trillion, rose by 0.22 per cent to close at N10.389 trillion due to price gains.
The All-Share Index grew by 65.94 points or 0.22 per cent to close at 30,231.16 against 30,165.22 achieved on Friday.
Forte Oil recorded the highest price gain to lead the gainers’ table, growing by N10.01 to close at N264.99 per share.
Mobil followed with a gain of N4.93 to close at N150, while Guinness gained N3.59 to close at N152.50 per share.
PZ Industries rose by N1 to close to N26, while Ashaka Cement grew by 59k to close at N23 per share.
On the other hand, Nigerian Breweries topped the price losers’ chart, dropping N2 to close at N138 per share.
It was trailed by Okomuoil with a loss of 66k to close to N28, while Flour Mills shed 63k to close at N21.37 per share.
UACN lost 17k to close at N28.90, while Access Bank also lost 13k to close at N5.07 per share. The volume of shares traded dropped to 134.62 million shares worth N1.48 billion in 2,900 deals on Monday. This is against the 188.04 million shares valued at N1.33 billion achieved in 21,500 deals on Friday.
Access Bank was the toast of investors with a turnover of 33.79 million shares worth N175.53 million in 96 deals.
Diamond Bank followed with 13.06 million shares valued at N39.14 million achieved in 166 deals, while Zenith Bank sold 9.93 million shares worth N166.64 million in 226 deals.
Cornerstone Insurance accounted for 9.30 million shares valued at N4.65 million in two deals, while UBA traded 9.25 million shares worth N40.63 million in 12 deals.
Source: Business Day
A former Managing Director/Chief Executive Officer of Diamond Bank Plc, Emeka Onwuka, has urged the Central Bank of Nigeria to remove all the controls introduced in the wake of the country’s foreign exchange rate crisis.
The move, he said, would encourage foreign investors to come into the country.
Onwuka said this while delivering a speech at a book launch in honour of the outgoing Group Managing Director/Chief Executive Officer, UBA Plc, Phillip Oduoza in Lagos on Wednesday. The book is titled, ‘Dynamics of the Nigerian financial system’.
He said the recent managed floating of the rate of the naira and the various reforms undertaken by the CBN were welcome developments.
According to him, the CBN require the patience and support of Nigerians for the market to settle and achieve the desired objectives of the new regime, adding that the rates at which the market settles will ultimately result in improved liquidity in the forex market.
Onwuka added, “It is expected that the forex market reforms will resolve the issues around the official forex market but the gap between that market and the parallel market may still remain at unacceptable levels. The CBN should consider lifting the forex ban on the 41 items currently excluded from the official market.
“This is an appropriate time to effect this, as the items will be funded from other autonomous sources outside of the CBN. Following on the back of this, all capital controls that were introduced on the onset of the forex rate crisis should be lifted. This will encourage entry of foreign investors as capital is a coward and stays on the sideline when there are doubts on its exit from any territory.”
However, he noted that it might be necessary to place a one-year minimum tenor on repatriation of all Certificate of Capital Importation transactions to discourage entry of ‘hot money’ given the current forward/futures products in the forex market.
The Nigerian banking market, according to him, is facing serious headwinds from slow Gross Domestic Product growth, falling forex reserves/availability and regulatory pressures.
He said, “The regulatory pressures on banks include: stricter regulatory oversight on Systematically Important Banks which increases the pressure to meet regulatory requirements; slower deposit growth fueled by lack of economic growth and public sector developments such as TSA; slowdown in lending with liquidity constraints and deteriorating macro environment; and inflation and growing risk premium, which drives interest rates.”
He, therefore, urged banks to refocus on the fundamentals of the trade, which include: offering seamless services to all Nigerian individuals and enterprises; driving further the digitalisation of banking services; elimination of the historic high cost to serve from the branching network; and maintaining highest standards on the management of credit.
On oil marketers receivables, Onwuka said there is currently a backlog of payments due to the downstream oil and gas companies and the receivables, which were funded by banks, are now past due in the books of most banks.
This, he explained, was compounded by the recent devaluation which has impaired the capacity of the customers to pay on outstanding trade obligations, adding that on the part of the government, the ability to clear the payments was limited by the dwindling earnings being experienced.
He said, “In resolving this situation, the government may consider floating a bond programme to cover the backlog including fporex differentials to date and the banks will be made to subscribe to the extent of their exposure to the oil marketers, thereby switching the relevant risk assets to liquid assets to improve their balance sheets. The government will then introduce petroleum products tax that will be used to fund the redemption of the bonds.”
He also pointed out that the payment system in the country had improved significantly with high volumes of transactions being undertaken electronically. “The cashless policy of the industry has a gone a long way in driving the improvements in the payment system,” he stated.
Despite the improvements highlighted, Onwuka said there remained significant amount of cash outside the banking system and very low banking penetration in Nigeria. He said measures of penetration such as deposit to GDP and Credit to GDP remained low at below 30 per cent whereas the BRICS countries are averaging about 50 per cent.
The profit after tax of Fidson Healthcare Plc dropped by 88 per cent in the firm’s half-year result for the period ended, June 30, 2016.
According to the data made available to the Nigerian Stock Exchange by the company on Monday, its PAT fell to N39.582m from N324.206m recorded in the prior period.
Its revenue plunged by 35 per cent to closed at N2.61bn from N4.034 for the period under review.
On a broader note, the NSE market capitalisation dropped by N10bn at the close of trading on the Exchange’s floor on Monday after the market recorded gains in 26 stocks.
The NSE capitalisation dropped to N9.489tn from N9.499 recorded on Friday last week, while the NSE All-Share Index closed at 27,629.90 basis points from 27,659.44 basis points.
A total of 378.513 million shares worth N2.268bn exchanged hands in 3,519 deals.
The highest index point recorded in the course of trading was 28,488.56 basis points, while the lowest and average index points were 27,629.90 and 27,659.44 basis points, respectively.
A total of 17 stocks recorded losses of various degrees, while a total of 26 stocks appreciated in value.
Forte Oil Plc, Seplat Petroleum Development Company Limited, Avon Crowncaps and Containers Nigeria Plc, Ikeja Hotel Plc and Continental Reinsurance Plc emerged as the top five losers.
The share price of Forte Oil dropped by N18.99 (9.74 per cent) to close at N175.91 from N194.90, while that of Seplat lost N16.50 (five per cent) to close at N313.50 from N330.
That of Avon Crown depreciated by N0.07 (4.83 per cent) to close at N1.38 from N1.45, while Ikeja Hotel recorded a loss of N0.09 (4.74 per cent) to close at N1.81 from N1.90.
Continental Reinsurance shares also lost N0.05 (4.72 per cent) to close at N1.01 from N1.06.
Other losers were Skye Bank Plc, Law Union and Rock Insurance Plc, Eterna Plc, Dangote Cement Plc, Guinness Nigeria Plc, among others.
Oando Plc, Transnational Corporation of Nigeria Plc, United Capital Plc, Nigerian Breweries Plc and Ecobank Transnational Incorporated Plc were the top five gainers.
Oando’s share price appreciated by N0.51 (9.96 per cent) to close at N5.63 from N5.12, while that of Transcorp recorded a N0.13 (9.63 per cent) gain to close at N1.48 from N1.35.
Other gainers were Custodian and Allied Plc, Honeywell Flour Mill Plc, DN Meyer Nigeria Plc, AxaMnasard Insurance Nigeria Plc, Livestock Feeds Plc, among others.
Financial analysts had said the performance of the capital market this week will be determined by the releases of more half-year results of quoted firms on the NSE, as well as the Monetary Policy Committee meeting scheduled for July 25 and 26, market analysts have said.
Following last week’s extended losses, they said the market could throw up bargains that could steer the coming sessions into gains as a result of both developments.
Bearish sentiments pervaded the Nigerian equities market last week, with the NSE All-Share Index declining in all five trading days of the week.
Following this development, the index slid by 2.91 per cent week-on-week to drag the year-to-date return to -3.43 per cent. While volume traded advanced by 17.47 per cent week-on-week, market turnover declined by 31.79 per cent week-on-week. The market recorded 15 advancers as against 45 decliners.
Skye Bank Plc topped the gainers’ chart in four out of the five trading days of the week, to emerge as the highest gainer, with 41.67 per cent week-on-week price gain.
For future sessions, analysts at Meristem Securities Limited, in the firm’s weekly analysis, said, “We expect an influx of earnings releases in the coming week, and therefore anticipate that investors’ perception about company scorecards, coupled with the outcome of the MPC meeting will dictate market performance in the week. “The past few years have been trying ones for the committee, as they meet once more at a time when they have to make policy decisions to guide the economy with little to no support from fiscal policy.
“The committee will be faced with a choice of increasing the benchmark interest rate to boost the United States dollar inflows, needed for better liquidity in a flexible foreign exchange market, and the realisation that raising the policy rate in a contracting economy will exert further pressure on output growth.”
According to the analysts, the debate recently oscillates between; what the committee should or will do, as the country has moved past the point when conventional policies would have an immediate impact, even if the pass-through mechanism was instantaneous.
They stressed, “We believe that boosting the dollar liquidity in the forex market is crucial, particularly considering the maturing $4bn forwards over the next two months, however, we opine that raising the monetary Policy Rate would have a detrimental impact on the Nigerian economy, which has most likely fallen into a recession.
“We posit that the MPC, given the available alternatives, will be inclined to tilt more in the direction of stimulating economic growth, in the hopes that a resurgence of the Nigerian economy will help to attract foreign investors in the medium to long term. We believe that this approach charts a more certain, albeit longer path to Foreign Portfolio Investors inflows rather than an immediate reaction, which may not eventually result in foreign funds repatriation, and would possibly only stifle economic growth further.”
In the same vein, the analysts in Vetiva Capital Management Limited, said, “With the MPC meeting scheduled for this week, we anticipate a relatively tepid sentiment across the fixed income market as participants trade cautiously.”
The fixed income market traded mostly bearish this past week as investors reacted to higher June inflation figure (which printed at 16.5 per cent year-on-year, higher than consensus estimate of 16.2 per cent).
Overall, yields in the Treasury bills and bond market rose to 205 basis points and 186bps on average across maturities, respectively.
The profit after tax of Tripple Gee and Company Plc dropped by 132 per cent in the first half of 2016, according to figures supplied by the firm to the Nigerian Stock Exchange on Tuesday.
The firm, which declared a profit of N5.202m in the same period for 2015, recorded a loss of N1.655m for 2016 H1.
Its turnover also dropped from N143.6m to N101.5m for the period under review, representing a drop of 29 per cent.
The firm’s gross profit also slid from N70.307m to N60.334m.
Meanwhile, the NSE closed Tuesday’s trading on a positive note, with market capitalisation rising to N9.597tn from N9.489tn.
The NSE All-Share Index also appreciated to 27,945.02 basis points from 27,629.90 basis points, with 24 stocks appreciating and 14 recording losses.
An aggregate of 286.716 million shares valued at N2.34bn exchanged hands in 4,316 deals.
The highest index point recorded in the course of trading was 28,221.18 basis points, while the lowest and average index points were 27,629.90 and 27,890.57 basis points, respectively.
Oando Plc, Ecobank Transnational Incorporated Plc, Access Bank Plc, Dangote Flour Plc and Livestock Feeds Plc emerged as the top five gainers.
The shares of Oando appreciated by N0.57 (10.12 per cent) to close at N6.20 from N5.63, while those of Ecobank gained N1.04 (8.39 per cent) to close at N13.43 from N12.39.
Access Bank share price also rose by N0.40 (7.55 per cent) to close at N5.70 from N5.30.
Other gainers were United Capital Plc, Guaranty Trust Bank Plc, Axa Mansard Insurance Plc, United Bank of Africa Plc, Zenith Bank Plc, Honeywell Flour Mill Plc, DN Meyer Nigeria Plc, Fidelity Bank Plc, among others.
Air Services and Logistics Plc, Seplat Petroleum Development Company Limited, 7UP Bottling Company Plc., NEM Insurance Company Nigeria Plc and Sterling Bank Plc emerged as the top five losers.
Air Service and Logistics share price slid by N0.10 (5.56 per cent) to close at N1.70 from N1.80, while that of Seplat depreciated by N15.67 (five per cent) to close at N297.83 from N313.50.
Activities on the Nigerian Stock Exchange resumed for the week on Monday on a negative note with the market indicators dropping by 0.11 per cent due to profit taking.
The market capitalisation, which opened at N9.499 trillion, lost N10 billion or 0.11 per cent to close at N9.489 trillion.
Also, the All-Share Index lost 29.54 points or 0.11 per cent to close at 27,629.90 compared with 27,659.44 recorded on Friday.
An analysis of the price movement table, showed that Forte Oil topped the losers’ chart, dropping by N18.99 to close at N175.91 per share.
Seplat Petroleum Development trailed with a loss of N16.50 and Dangote Cement shed N4.50 to close at N175 per share.
Guinness declined by N1.48 to close at N95, while Lafarge Africa shed 41k to close at N59.24 per share.
On the other hand, Nigerian Breweries led the gainers’ table growing by N6.90 to close at N144.91 per share.
Total Nigeria followed with a gain of N1.50 to close at N181.50 and Ecobank Transnational Incorporated appreciated by 59k to close at N12.39 per share.
Oando gained 51k to close at N5.63 and Zenith Bank grew by 28k to close at N15.63 per share.
FBN Holdings emerged the most traded equity, exchanging 114.92 million shares worth N399.52 million.
It was followed by Access Bank with a turnover of 48.59 million shares valued at N254.43 million and Skye Bank sold 41.38 million shares worth N32.47 million.
Investors staked N136.55 million on 31.37 million shares of United Bank for Africa and Zenith Bank exchanged 27.14 million shares worth N424.69 million.
In spite of the drop in market indices, the volume of shares traded closed higher with an exchange of 378.51 million shares valued at N2.27 billion transacted in 3,519 deals.
This is against the 255.73 million shares worth N2.11 billion achieved in 3,659 deals on Friday.
Emerging-market stock valuations rose to a 14-month high and volatility traded near a one-year low as growing confidence the world economy is on the mend outweighed a rising tide of political risks. Turkish bond yields headed for the biggest four-day increase since 2013.
The MSCI Emerging Markets Index traded at 12.3 times the projected earnings of its members, above the average of 11.2 in the past 10 years. A gauge of expected volatility in developing-nation equities fell for a third day, trading less than 0.5 point from lowest level since July 2015.
Benchmark gauges in Indonesia and Thailand rose at least 1 percent on Wednesday. Russia’s ruble strengthened, ignoring a verbal intervention from President Vladimir Putin, while the Malaysian ringgit led Asian currencies lower.
Developing-nation stocks are gaining as expectations the Federal Reserve will refrain from raising interest rates this year, and better-than-estimated economic data from the U.S., stoke risk appetite. The optimism for continued central-bank stimulus around the world helped equities post the best first-half performance since 2009 relative to advanced-nation shares after three years of underperformance.
“Emerging markets will continue to do well,” said Maarten-Jan Bakkum, a senior strategist at NN Investment Partners in The Hague, who favors Indian shares.
“The relative risk profile of emerging versus developed markets has improved due to the Brexit uncertainties and emerging-market growth momentum is clearly improving now.”
The MSCI gauge rose 0.1 percent to 869.13 at 12:15 p.m. in London, rebounding from yesterday’s 0.2 percent loss. Eight out of 10 industry subgroups climbed, led by health-care companies. A measure of developing-nation currencies added less than 0.1 percent.
The stocks gauge is showing a technical pattern that was seen only four times since the 2008 financial crisis and led to rallies on two of those occasions. The index has made a signal-line crossover on its monthly moving average convergence-divergence chart. A similar move in July 2009 heralded a 47 percent jump and in April 2014, it was followed by a 10 percent gain.
Investors dumped Turkish assets as President Recep Tayyip Erdogan’s move to deepen a purge of those associated with the last week’s failed coup highlighted the growing political risks of investing in the country. Investors sent up the cost of hedging against a default by the government in Ankara in the next five years near the levels of junk-rated countries.
JPMorgan Chase & Co. said $7.2 billion of sovereign bonds and $1.5 billion of corporate debt are at risk of forced selling if Turkey loses investment-grade status from Moody’s Investors Service, which says it is reviewing the country’s debt for a downgrade.
Turkey’s 10-year bonds fell, sending the yield up 31 basis points to 10.2 percent.
Nigeria will hold a non-deal roadshow in London next week, government sources said on Wednesday, as Africa’s biggest economy explores fund-raising options to finance a record budget deficit widened by the fall in vital oil revenues.
Finance Minister Kemi Adeosun and officials from the central bank and debt office will meet investors next Tuesday to update the market on government policies. Standard Chartered Bank is organising the meeting, the source said.
Nigeria plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources, to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira.
“It’s non-deal roadshow to explain government policy to investors. There’s no transaction. It’s been a while since the government came to London to update investors on what’s happening,” he said.
The head of the Debt Management Office told Reuters last week Nigeria is likely to sell a Eurobond this year.
Nigeria has pushed ahead with some reforms meant to free up cash to invest in badly needed infrastructure, but critics worry about the pace, given the loss of oil revenues and a currency peg that has caused the economy to contract.
In mid-May the government hiked petrol prices by 67 percent to 145 naira, ending an expensive subsidy scheme that has cost it billions of dollars. It used a rate of N285 to the dollar to set the prices, compared with an official rate of 197.
The move prompted the central bank to abandon its 15-month naira peg to the dollar to adopt a flexible currency regime, a policy U-turn designed to boost exports and local manufacturing and to stave off a recession.
But the bank has yet to clarify how the new policy announced last week would work, spooking foreign investors long worried about getting caught in the middle of a devaluation.
President Muhammadu Buhari for months rejected calls to devalue the naira. However, during his Democracy Day speech on Sunday he backed the central bank’s decision to move away from a currency peg that is seen as overvaluing the naira.
A banking source in London told Reuters that the market was in the dark over the central bank’s new currency policy.
“The reason why Nigeria is reluctant to come to the market is that the government knows investors will ask about the currency issue,” the banker said.
Equity transactions on the Nigerian Stock Exchange sustained sliding profile yesterday, as virtually all the blue chip companies suffered price depreciation, as investors’ wealth plunges further by N176 billion. in three trading days.
Specifically, market capitalization of listed equities depreciated by N176 billion or 1.8 per cent, from N9868 trillion achieved on Monday to N9,692 trillion.
Similarly, the All-share index dropped by 512.72 points or 1.8 per cent from 28,733.90 to 28,221.18.
Yesterday, 27 stocks depreciated in price, led by Oando, shedding 9.56 per cent to close at N5.39 per share. Law union and Rock followed with 7.27 per cent to close at N0.51 per share. Trans National Corporation shed 7.24 per cent to close at N1.41 per share.
Stancbic IBTC dropped 4.83 per cent to close at N14.20 per share. Fidson lost 4.72 per cent to close at N2.02 per share. Honeywell flourmills dropped 4.46 per cent to close at N1.50 per share.
First City Monument Bank and Zenith Bank shed 4.41 and 3.97 per cent to close at N1.30 and N15.50 per share. TigerBrands shed 3.51 to close at N3.85 per share. Livestock shed 3.09 per cent to close at N0.94 per share.
On the other hand, eight stocks made the gainers table, as Skye bank emerged the highest price gainer with 8.33 per cent to close at N0.78 per share. Premier Breweries gained 4.98 per cent to close at N2.95 per share.
TransNational Express added 4.95 per cent to close at N1.06 per share. Dangote Sugar Refinery garnered 2.26 per cent to close at N6.80 per share. NPF Micro finance Bank gained 1.06 per cent to close at N0.95 per share.
Flourmills added 0.93 per cent to close at N21.70 per share. Ikeja Hotel gained 0.53 per cent to close at N1.90 percent. Nigerian Breweries also garnered 0.04 per cent to close at N135.10 per share.
Trading activities on the Nigerian Stock Exchange, for the third consecutive day, remained on a downward trend with major blue chips equities recording price depreciation.
The All-Share Index on Wednesday lost 267.38 points or 0.94 per cent to close at 28,221.18 against 28,488.56 posted on Tuesday.
The market capitalisation, which opened at N9.784 trillion, shed N92 billion or 0.94 per cent to close at N9.692 trillion.
Dangote Cement topped the losers’ chart, dropping by N2.50 to close at N187.50 per share.
Total trailed with a loss of N2 to close at N180, while Stanbic lost 72k to close at N14.20 per share.
Zenith Bank shed 64k to close at N15.50 and Oando dipped 57k to close at N5.39 per share.
Conversely, Flour Mills recorded the highest price gain to lead the gainers’ table, growing by 20k to close at N21.70 per share.
Dangote Sugar followed with a gain of 15k to close at N6.80, Premier Breweries gained 14k to close at N2.95 per share.
Skye Bank increased by 6k to close at 78k and Nigerian Breweries also appreciated by 6k to close at N135.10 per share.
NEM Insurance drove the volume of shares with an exchange of 93.34 million shares worth N93.34 million.
It was trailed by United Bank for Africa (UBA), accounting for 40.74 million shares valued at N185.51 million and Skye Bank traded 35.95 million worth N28.02 million.
Transcorp sold 25.49 million shares valued at N36.46 million and FBN Holdings 18.03 million worth N63.06 million.
In all, a total of 309.72 million shares valued at N2.08 billion were exchanged by investors in 3,934 deals compared with the 242 million shares worth N1.56 billion transacted in 3,684 deals on Tuesday.
Guaranty Trust Bank Plc and Access Bank Plc have appealed to the Nigerian Stock Exchange to extend the deadline for the submission of their financial results for the first half of 2016.
The banks made this position known in separate letters to the Exchange.
The GTB said members of its board of directors were scheduled to meet on July 27, 2016 to consider the audited financial statement.
It said it would be submitting the result not later than September 30, 2016.
The bank promised to notify the Exchange of the decision taken after the Central Bank of Nigeria’s approval is received on the matter.
Access Bank also gave a similar reason and appealed to the Exchange to extend the submission date for its results until the meeting of its directors on the matter later in the month.
The bank said it would submit its results not later than August 31, 2016.
Its board of directors is expected to meet on July 28, 2016 to approve the bank’s half-year audited financial statements after which it would be submitted to the CBN for approval.
Meanwhile, the NSE recorded a loss of N25bn in market capitalisation at the close of trading on the Exchange’s floor on Monday.
The market capitalisation closed at N9.868tn from N9.893tn; the NSE All-Share Index also plunged to 28,733.90 basis points from 28,805.45 basis points.
A total of 315.577 million shares valued at N1.724bn were traded in 3,976 deals.
The market recorded 29 losers and 10 gainers.
Law Union and Rock Insurance Plc, Lafarge Africa Plc, Arbico Plc, Unity Bank Plc and Vitafoam Nigeria Plc led the losers’ table.
Law Union and Rock Insurance shares depreciated by N0.05 (8.33 per cent) to close at N0.55 from N0.60, while those of Lafarge Africa closed at N63.22 from N66.60, losing N3.38 (5.08 per cent).
Arbico share price also dropped by N0.25 (4.96 per cent) to close at N4.79 from N5.04, while that of Unity Bank lost N0.05 (4.90 per cent) to close at N0.97 from N1.02.
Other losers were Livestock Feeds Plc, Ikeja Hotel Plc, Oando Plc, Tiger Branded Consumer Goods Plc, Honeywell Flour Mill Plc, Sterling Bank PLc, Wema Bank Plc, AIICO Insurance Plc, United Capital Plc, Axa Mansard Insurance Plc, Fidson Healthcare Plc, Cadbury Nigeria Plc, Ecobank Transnational Incorporated Plc, FCMB Group Plc, FBN Holdings Plc, among others.
The Securities and Exchange Commission (SEC) has expressed its determination to raise the participation of retail investors in the Nigerian Capital market, as that is one of the critical ways of deepening the market.
Director General of SEC, Mounir Gwarzo, stated this when the Management of the commission visited the Federal Radio Corporation of Nigeria (FRCN) on an advocacy visit on the 10-year Capital Market Master Plan.Gwarzo stressed that the dominance of the market by foreign investors is one of the reasons why the market is not as deep as it ought to be.
He said, “Our intention is to ensure that we raise the level of participation of retail investors in the Market that is the only way we can maintain the strength of the market. Dominance of the market by foreign investor is one of the reasons why our market is the way it is. Although it is the pattern of the market, but this dominance is a major factor because they are the ones that come in and come out. We need to upscale the participation of the retail investors in the market and that is why we are addressing some of their concerns.Anyone you meet today and tell him to come back, the issue of unclaimed dividends is always a major problem.”
In order to achieve this, the DG disclosed that the Commission has embarked on various initiatives like recapitalisation, e-dividend registration, the Direct Cash Settlement as a direct benefit to investors from the e-dividend registration as when they register for e-dividend, anytime their shares are sold, they would get the proceeds directly in their bank accounts among others.
“We are urging Nigerians to go and register to get their dividends electronically. Once we get through with the e-dividend thing, we will be able to deal with other issues in the market. The entire market has commenced Direct Cash Settlement. The era when shares will be sold and the proceeds will be given to the broker who will them pay the client is over. What is obtainable now is that once the shares of an individual are sold, the proceed is paid directly into his band account. With this once the client has authorized the broker and provided all his details, the proceeds will be paid into the client’s account.”
Gwarzo said that every year the Commission comes up with various initiatives from the Master Plan and have been implementing them adding “all the initiatives we came up with last year we have implemented them. This year we also came up with certain initiatives and one of them is the need for all arms of government to buy into the Capital Market Master Plan. It is only in Nigeria that we have not been given the kind of attention that the capital market deserves. The capital market is the one that defines the state of the economy.
He expressed the need for some laws to be amended in order to grow the capital market. According to him, “for instance there is a provision in CAMA that states that once dividend is declared, after 12 years if it is not claimed it become statue barred meaning an investor cannot claim his dividend. We don’t think that is right, the international best practice is that dividend must be in perpetuity.
“Once you can supply evidence that it is yours, that person should be able to claim it. The lacuna is a provision of the law and we are partnering with the parliament to see that such laws are amended and we had an excellent collaboration with them”.
The DG further expressed the hope that incentives will be provided so that companies doing business in Nigeria are encouraged to list on the exchange. “We think companies should be listed on our exchange. We are not advocating that it should be mandatory, but we feel the companies should be given some incentives for them to list. We don’t think it is right for foreign companies to be listed in their home countries and then come here and spend five, ten years and not be listed. Getting more companies listed will make the marker deeper and these are some of the initiatives we are pursuing this year”, he added.
In his remarks, Director General of FRCN, Dr. Mansur Liman, said the primary mandate of the organization is to inform, educate and entertain adding that it is a responsibility bestowed on the organisation to educate the Nigerian public on what the SEC is doing.
Liman expressed his happiness with the initiative and assured the SEC of the necessary co-operation and support to reach the grassroots.“E-dividend is very important because it is the norm in developed countries and I think it will help to restore the confidence e of the local investor. When people invest and they are able to get their dividend and on time it is a way of restoring their confidence.
“The international investors comes in to make money and when there is any shock, they simply withdraw and their withdrawal creates a lot of problems in the market and it takes a long time again for it to recover.
“This is very good as ultimately the sustainability of the market depends on the local investor and not on the foreign investor. When the local investor invests and he knows it is not for making quick money but for long term that is when the market will be sustained”, he added.
The Securities and Exchange Commission (SEC) in reaction to retail investors’ plight said that effective implementation of the capital market ten year master plan would go a long way to addressing major problems in the market. Director General of SEC Nigeria, Mounir Gwarzo said this in Abuja saying “A successful implementation of the 10 year master plan is necessary to attract retail investors to the market, address some of the challenges that Nigeria’s Capital market faced during the global capital market crash that occurred in 2008-2010 and also raise the standard of the market.
According to the DG “the market went down and a lot of investors lost money in this market and sometimes two years after, the Capital Market Committee (CMC) felt there was a need to come together and prepare a document that will be able to address some of these challenges “You also recall that in the 90s you had the Asian crisis where a lot of stock markets especially within the Asian countries went down and a few countries within the region, Asia and Malaysia prepared a very robust Master Plan.
Malaysia had a Master Plan from 2001 and they religiously implemented their Master Plan and after the completion of the Ten Year Master Plan the market was able to grow in terms of recapitalization of the Market, new products, more listings, quality of operators in the market. They were also able to address a lot of management issues at that time. He noted that since the new Management came on board, they decided to implement the plan that the entire market prepared and that is why every year the SEC comes up with some initiatives that the market can drive.
Gwarzo listed some of the recorded achievements in implementing the Master Plan to include Recapitalization, Direct Cash Settlement, E-Dividend, National Investors Protection Fund (NIPF), and Corporate Governance Scorecard among others. He emphasized that the only way to attract retail investors back to the market is to ensure that concrete steps are taken to adequately address their concerns especially the issue of unclaimed dividend. “The issue of unclaimed dividend which according to our records is in excess of N80billion will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed.
“Once we are able to get through with the registration process, those dividends that are less than 12 years, once the registrars can certify that the people are the owners, they should be able to pay them. Gradually we should be able to address their problem of unclaimed dividends” he said.
He also disclosed that with Direct Cash Settlement, the era where shares will be sold and the proceeds will be given to the broker who will them pay the client is over as what is obtainable now is that once the shares of an individual are sold, the proceed is paid directly into his bank account.
With this once the client has authorized the broker and provided all his details, the proceeds will be paid into the client’s account. “We have no other place to invest our little funds than in our market and that is why we are trying to cultivate your appetite and the only way to do that is to address some of these issues. Once these issues are addressed and the retail investor returns, we will be able to raise participation in the market from 2 per cent it is now to about 4 per cent in the next 10 years.
Kedari Capital has announced the opening of its Kedari Investment Fund initial public offering to interested investors and the general public. The Fund which opened on the 11th of July 2016 and is set to close on the 19th of August 2016 is an open-ended unit trust scheme which invests predominantly in fixed income securities as well as in equity securities.
The Investment Fund was designed for investors seeking to optimise their returns at minimal risk and also provides a relatively cheap opportunity for investors to build wealth at a considerably lower risk than direct stock investments and higher potential returns than fixed income instruments.
In his comment, Chairman of Kedari Capital, Segun Aina noted that “with this Fund we are offering investors the opportunity to have access to professional portfolio management, a highly liquid Fund where investors can cash in their investments within the stated rules in the Fund’s Trust Deed. Additional units in the Fund can be created and purchased on demand by subscribers on an on-going basis at a price computed in accordance with the Securities and Exchange Commission of Nigeria’s approved basis for computing offer price.”
The Nigerian Insurers Association says that it is committed to achieving its growth targets for the sector.
The Chairman, NIA, Mr. Eddie Efekoha, who is also the Managing Director/Chief Executive Officer, Consolidated Hallmark Insurance Plc, stated this, just as he sought the cooperation of the stakeholders in achieving the four major objectives of the sector.
He spoke in Lagos while giving his acceptance speech as the new NIA chairman.
He promised to build on the achievements of his predecessors, and gave the theme of his administration as: ‘Sustainable market development through stakeholders’ engagement’.
The new chairman said his programmes would ensure stakeholders’ engagement with policymakers at the judiciary, the legislature and other relevant agencies of the government, as well as regulatory institutions and industry players.
Efekoha said he would work on the enforcement of market discipline among key industry players, which would involve the engagement with colleagues and partners in the industry to encourage market development and continuity in the industry.
The chairman said his administration would review the NIA constitution to make it more dynamic in response to the changing business environment.
He added that he would work on other current projects embarked upon by the association, especially the NIA building project.
Efekoha is a fellow of both the Chartered Insurance Institutes of London and Nigeria and holds a Bachelor’s degree in insurance and a Master’s degree in business administration, both from the University of Lagos, according to the association.
He is an alumnus of both Lagos and Harvard Business schools, a member of the governing council and treasurer of the Chartered Insurance Institute of Nigeria, an insurance trainer with specialisation in property and engineering insurances.
The Securities and Exchange Commission has said the fate of the country’s capital market lies with the participation of retail investors, hence its determination to raise their involvement.
It said raising retail investors’ participation was one of the critical ways of deepening the market.
The Director-General, SEC, Mounir Gwarzo, said this when the management of the commission visited the Federal Radio Corporation of Nigeria on an advocacy visit in respect of the 10-year Capital Market Master Plan.
Gwarzo stressed that the dominance of the market by foreign investors was one of the reasons that it was not as deep as it should be.
He said, “Our intention is to ensure that we raise the level of participation of retail investors in the market; that is the only way we can maintain the strength of the market. Dominance of the market by foreign investors is one of the reasons why our market is the way it is.
“Although it is the pattern of the market, foreign dominance is a major factor because the foreigners are the ones that come in and come out. We need to upscale the participation of the retail investors in the market and that is why we are addressing some of their concerns. Any retail investors you ask to come back will always raise the issue of unclaimed dividends and so on.”
In this light, the DG disclosed that the commission had embarked on various initiatives like recapitalisation, e-dividend registration and direct cash settlement as a direct benefit to investors from the e-dividend registration.
Gwarzo added, “We are urging Nigerians to go and register to get their dividends electronically. Once we get through with the e-dividend thing, we will be able to deal with other issues in the market. The entire market has commenced direct cash settlement.
“The era when shares will be sold and the proceeds given to the broker who will then pay the client is over. What is obtainable now is that once the shares of an individual are sold, the proceeds are paid directly into the client’s bank account. With this, once the client has authorised the broker and provided all his details, the proceeds will be paid into his account.”
Gwarzo said that every year the commission was coming up with various initiatives from the master plan and had been implementing them, adding, “We have implemented all the initiatives we came up with last year.”