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Panic as Unilever, PZ threaten to leave Nigeria
05 Feb. 2009 00:00
Dipo Kehinde, Segun Adeleye & Segun Edwards
Unilever Plc and... Paterson Zochonis (PZ) Plc are considering pulling out of Nigeria, with possible relocation to neighbouring, Ghana because they could no longer bear the loss to business from the continued deplorable state of basic infrastructure in the country.
The companies are about to join the list of over 150 multinational industries that have divested from the economy since 1995.
According to the Nigerian Compass investigations, more than 60 per cent of local industries, mostly small scale enterprises, folded up since 1986, when the Structural Adjustment Programme (SAP), was introduced.
Going by official statistics, the organised private sector shed 131,000 jobs in 1997 alone, while 70,000 jobs were lost in the public sector. The figures have multiplied since then.
According to their official sites, both companies have combined workforce of 5,249 staff. PZ has a workforce of 3,775 in Nigeria, while Unilever has 1,474 employees.
There is anxiety in the business circle that the exit of the multinationals would further bring the economy to its kneels.
Both Unilever Plc and PZ Plc have been existing in Ghana.
According to sources, if they pull out of Nigeria, they would only need to expand their operations in the neighbouring country to sustain the Nigerian market which is their biggest in Africa.
Nigerian operations have consistently contribute a high proportion of PZ Cussons group’s earnings in recent years. But the complaint remains that the cost of production has hit the roof, due to the cost of self-generated power. A reliable source said PZ would not likely make a public announcement that it would pull out of Nigeria, but it is considering disposing its stock of raw materials and expanding its operations in Ghana.
The calculation of the firms that are finding Ghana attractive is that with the Economic Community of West African States’ free trade treaty, they can easily ship their goods back to service the Nigerian local market.
While Nigeria with over 6,000 megawatts (MW) of installed capacity of electricity power could barely generate 2,000MW, Ghana has been enjoying uninterrupted power supply for over 10 years. Energy experts say Nigeria, with a population of over 140 million, needs over 60,000MW to be self sufficient in power supply.
Comparatively, South Africa, with a population of 48 million can boast of over 39,500MW from Eskom, the counterpart of Nigeria’s NEPA.
Besides, inadequate power supply which cost billions of naira, Unilever and PZ are also said to be indifferent to the multiple taxations regime in Nigeria, which has also reduced their profits drastically.
On the implication of the possible relocation of the two firms to their shareholders, since they are listed on the Nigerian Stock Exchange (NSE), a shareholder and leader of the Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie said: “If it is true that the companies want to relocate, which is possible because they owe their shareholders the obligations to return value through returns, they may seek de-listing from the Exchange and value the worth of every shareholders’ in the company to be able to pay them off.”
According to him, government should, as a matter of urgency, intervene in the issue of the deplorable situation of basic infrastructure in the country.
He said that the same problem forced all the textile factories out of business, while the promise by government to bail out the industries with a proposed N70 billion intervention funds is yet to be fulfilled.
One of the listed companies in the stock market, CFAO, applied to the NSE for de-listing, over inability to continue to fulfil its obligations to shareholders two years ago, while shareholders were paid off.
According to sources, a possible relocation of PZ and Unilever from Nigeria would greatly hurt the economy in view of their operations that spread across the country, where they sustain many small businesses and families.
PZ Cussons Nigeria Plc is currently the largest subsidiary of PZ Cussons. It has over 100 years’ experience of trading in Africa and has enjoyed tremendous business success in Nigeria with a strong portfolio of local brands. The company’s tentacles spread to almost every state in the country.
It’s operations started in 1879, when George Paterson and George Zochonis set up a trading post in Sierra Leone.
In 1899, Paterson Zochonis (PZ) opened a branch office in Nigeria and acquired its first soap factory in the country in 1948.
In 1973, PZ entered the detergent and refrigerator markets, simultaneously in Nigeria. And in 2003, PZ Cussons Plc entered into a joint venture (Nutricima) with Glanbia Plc to supply evaporated milk and milk powder in Nigeria, two years later the Nutricima JV commenced manufacturing in Nigeria.
With 3,775 employees in Nigeria as against 556 in Ghana and 292 in Kenya, the group’s product lines, the main brands, include - Elephant Blue Detergent, Zip, Jet, Tempo, Rex, Morning Fresh.
Others are soaps, pharmaceuticals, balms, skin and baby care products including: Premier, Imperial Leather, Joy, Duck, Canoe, Drum, Super Atlas, Maladrin, Zubes, Robb, Heatol, Super Robb, Medicated Dusting Powder; Venus, Stella Pomade.
The company also stock perfumes, household appliances and diary products, namely: Dan Duala, Venus Gold, Joy Cologne, Coast milk, Nunu, Olympic, Power Fist, Haier Thermocool and a range of other electronics.
One of its key strengths in Africa is the extensive network of depots and factories in Nigeria.
The financial positions of PZ for the year ended May 31, 2008 revealed that the company’s turnover grew by 22 per cent from N54.21billion in 2007 to N65.94billion in 2008.
Its profit after tax rose to N3.95billion, in the year, from N3.52billion recovered in 2007, representing 12 per cent increase, while its profit before tax item equally grew by 12 per cent from N5.35billion in 2007 to N5.98billion
The company’s shareholders’ funds presently stands at N32.76billion as against N30.56billion in 2007, while it paid a tax of N2.02billion in the year under review as against N1.27 in 2007.
Its five-year financial summary showed that the company’s assets base grew from N21.57billion in 2004 to N36.28 billion in 2008.
The turnover has grown from N27.99billion in 2004 to N65.94billion. The basic earnings per share presently stands at N124 from N0.83 in 2004, N127 in 2005 and 2006, and 138 in 2007.
Shareholders were paid N2.01 per share in the current year, against N1.94 in 2007, while the number of shareholders of the company stands at 79,020, with PZ Cussons Plc, Manchester, United Kingdom having the majority holding of 61.4 per cent of the paid up capital as May 31, 2008.
Its Directors include Professor E.C Edozien, as the largest Nigerian shareholder with 3.88 million shares; Mr. B. Oyelola 441,106 shares; J.O. Akande, 76,435 shares; Mrs O.T. Ifaturoti, 20,226 shares and A.A. Raji 74,410 shares.
Unilever is a multi-national corporation, formed of Anglo-Dutch parentage that owns many of the world’s consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employs nearly 180,000 people and had a worldwide revenue of almost £40 billion in 2005.
Unilever Nigeria Plc, was incorporated as Lever Brothers (West Africa) Ltd on April 11, 1923 by Lord Leverhulme, but the company’s antecedents have to be traced back to his existing trading interests in Nigeria and West Africa generally, and to the fact that he had since the 19th century been greatly involved with the soap business in Britain.
Unilever Nigeria Plc started as a soap manufacturing company, and it is today one of the oldest surviving manufacturing organisations in Nigeria.
After series of mergers/acquisitions, the company diversified into manufacturing and marketing of foods, non-soapy detergents and personal care products. These mergers/acquisitions brought in Lipton Nigeria Ltd in 1985, and Cheesebrough Ponds Industries Ltd., in 1988. The company changed its name to Unilever Nigeria Plc in 2001.
Unilever Nigeria Plc is a public liability company quoted on the Nigerian Stock Exchange since 1973 with Nigerians currently having 49 per cent of equity holdings.
The company’s principal activity is manufacturing and marketing foods and food ingredients, and home and personal care products. It has manufacturing plants in Aba, Lagos and Agbara. Product brands include Blue Band, Close Up, Key, Knorr, Lipton, Lux, Omo, Pears, Royco and Vaseline.
Unilever PLC in 1994 divested its 40 per cent interest in UAC of Nigeria Plc while the latter became a wholly-owned Nigerian company.
Unilever’s financial report for the year ended December 31, 2007, showed that the turnover grew to N33.99 in the year from N25.55billion in 2006.
The company recorded a loss of N2.01billion in the period under review as against N2.12billion in 2006, while it incurred tax expenses of N716.61million as against N645.87million in 2006.
It paid a dividend of N945.82million as against nil in 2006, representing N0.05 per share to shareholders.
Its parent company, Unilever Overseas Holding B.V, has a majority holding of 1.89 billion shares, representing 50 per cent.
The company’s Directors include Apostle Hayford Alile, former Director General of the NSE, who has 31,250 shares; Egwe N.A Anichebe 65,976; Chief Samuel Adegbite, 227,543; Mr. Felix Ohiwerei, a former MD and Chairman of the company and also former MD and Chairman of Nigerian Breweries Plc.
Thursday, 5 February 2009
DENIALS GALORE
By Yemi Kolapo and Everest Amaefule
Published: Thursday, 5 Feb 2009
The Securities and Exchange Commission has dissociated itself from the comments made by its Executive Commissioner, Legal and Compliance, Mr. Charles Udorah, on behalf of the Director-General, Mr. Musa Al-Faki, calling for a government bail-out for sick banks and firms.
SEC, on Wednesday, declared that statements made by the commissioner, who represented Al-Faki at the Forum of Accountants General of states in Abuja on Monday, did not reflect the position of the commission.
“The management of SEC wishes to state categorically that those statements do not reflect the position of the commission and, therefore, dissociates itself from those views,” it said in a statement signed by the Head, Media, Mr. Lanre Oloyi.
Udorah, who spoke for the DG, had blamed chief executives of certain banks for the crisis in the capital market, saying the time was ripe for the Federal Government to take controlling interest in banks and other companies quoted on the Nigerian Stock Exchange.
He said the take over of controlling shares in unhealthy banks, which were owed N388bn by stockbrokers, should be followed by the injection of fresh hands and the prosecution of “the chief executive officers that had been overcome by greed.”
Meanwhile, the Chartered Institute of Bankers of Nigeria has refuted allegations of misconduct leveled against the banking sector by SEC, saying that the market regulator was incompetent.
In a statement on Wednesday, the institute said, “Chances are that the SEC, under massive pressure from the investing public, has resorted to diversionary tactics to cover up its failure in regulating and managing the stock market. It is time regulators stop fighting themselves and focus on their responsibilities to the investing public.”
According to the statement, signed by the Registrar/Chief Executive, CIBN, Dr. Uju Ogubunka, “The Nigerian stock market is simply drifting rudderless and we now call on the Federal Government to quickly arrest the situation by overhauling the regulatory machineries and consequently, the level of operational efficiency and transparency. Time is running out and the price Nigerians are paying for this regulatory blindfold cannot but be imagined.”
The bankers said the industry might have paid its price for performing its financial intermediation role such of lending. They noted, however, that, weighed against the strength of the capital base of even the smallest bank in Nigeria today, the impact was minimal.
“None of the banks has been found wanting in ethical conduct as far as their stock market activities are concerned, neither has any of them been found guilty by any court of law in this regard,” it added.
Separately, the Minister of State for Finance, Mr. Remi Babalola, on Wednesday, in Abuja, said that the Federal Government was working on several options to restore confidence in the stock market just as he disputed SEC’s claims.
He said, “The truth is that it is only when we have a categorical statement from the banking regulators and from the financial institutions that we can determine the extent of debts in the banking system and that is what I will rely on.
“I cannot rely on a speech SEC gave because I don’t know the basis of that figure, but if for instance, the regulator of the banking system came out to say this is the make up for each of the banks and this is the exposure they have, then we can agree.
“It is not only in the capital market, there is significant exposure in the downstream. There are so many areas that people might have recorded significant downside. What we need to do is to quantify all these and try to see how we can take it out and give them fresh air to continue their business.”
TIGERKENN COMMENTS
Well, let us deny the fact that we were afraid of the banks and getting ready to pull our funds, let us also deny that we were shaken in our resolve to invest more money. It was good news all though. Lets forgive the market and press forward. It all never happened.
Published: Thursday, 5 Feb 2009
The Securities and Exchange Commission has dissociated itself from the comments made by its Executive Commissioner, Legal and Compliance, Mr. Charles Udorah, on behalf of the Director-General, Mr. Musa Al-Faki, calling for a government bail-out for sick banks and firms.
SEC, on Wednesday, declared that statements made by the commissioner, who represented Al-Faki at the Forum of Accountants General of states in Abuja on Monday, did not reflect the position of the commission.
“The management of SEC wishes to state categorically that those statements do not reflect the position of the commission and, therefore, dissociates itself from those views,” it said in a statement signed by the Head, Media, Mr. Lanre Oloyi.
Udorah, who spoke for the DG, had blamed chief executives of certain banks for the crisis in the capital market, saying the time was ripe for the Federal Government to take controlling interest in banks and other companies quoted on the Nigerian Stock Exchange.
He said the take over of controlling shares in unhealthy banks, which were owed N388bn by stockbrokers, should be followed by the injection of fresh hands and the prosecution of “the chief executive officers that had been overcome by greed.”
Meanwhile, the Chartered Institute of Bankers of Nigeria has refuted allegations of misconduct leveled against the banking sector by SEC, saying that the market regulator was incompetent.
In a statement on Wednesday, the institute said, “Chances are that the SEC, under massive pressure from the investing public, has resorted to diversionary tactics to cover up its failure in regulating and managing the stock market. It is time regulators stop fighting themselves and focus on their responsibilities to the investing public.”
According to the statement, signed by the Registrar/Chief Executive, CIBN, Dr. Uju Ogubunka, “The Nigerian stock market is simply drifting rudderless and we now call on the Federal Government to quickly arrest the situation by overhauling the regulatory machineries and consequently, the level of operational efficiency and transparency. Time is running out and the price Nigerians are paying for this regulatory blindfold cannot but be imagined.”
The bankers said the industry might have paid its price for performing its financial intermediation role such of lending. They noted, however, that, weighed against the strength of the capital base of even the smallest bank in Nigeria today, the impact was minimal.
“None of the banks has been found wanting in ethical conduct as far as their stock market activities are concerned, neither has any of them been found guilty by any court of law in this regard,” it added.
Separately, the Minister of State for Finance, Mr. Remi Babalola, on Wednesday, in Abuja, said that the Federal Government was working on several options to restore confidence in the stock market just as he disputed SEC’s claims.
He said, “The truth is that it is only when we have a categorical statement from the banking regulators and from the financial institutions that we can determine the extent of debts in the banking system and that is what I will rely on.
“I cannot rely on a speech SEC gave because I don’t know the basis of that figure, but if for instance, the regulator of the banking system came out to say this is the make up for each of the banks and this is the exposure they have, then we can agree.
“It is not only in the capital market, there is significant exposure in the downstream. There are so many areas that people might have recorded significant downside. What we need to do is to quantify all these and try to see how we can take it out and give them fresh air to continue their business.”
TIGERKENN COMMENTS
Well, let us deny the fact that we were afraid of the banks and getting ready to pull our funds, let us also deny that we were shaken in our resolve to invest more money. It was good news all though. Lets forgive the market and press forward. It all never happened.
Wednesday, 4 February 2009
MINI BULLS
Activities in the NSE have been so poor this year as to tempt some stock traders to abandon stock trading altogether. The low level of liquidity, capital flight and investor apathy unknown before in the capital market has combined to make January one of the worst trading months on the NSE.
There were signs that the market will rebound as early as Friday last week, but the index chalked its first gain on Monday. Gains by highly capitalized stocks like NB, Oando, FBN, etc has pushed the index up for two days now, so where do we go from here. This is the time traders make their worst mistake. Some traders will just wake up now and remember that they have not bought some stocks, invade the market with the hope of making a kill. These investors will buy stocks now after some stocks have gained about 15 %. They then hope and pray that the stock will continue to move up.
I think it is late to buy now if you have short time trades as an objective.
There were signs that the market will rebound as early as Friday last week, but the index chalked its first gain on Monday. Gains by highly capitalized stocks like NB, Oando, FBN, etc has pushed the index up for two days now, so where do we go from here. This is the time traders make their worst mistake. Some traders will just wake up now and remember that they have not bought some stocks, invade the market with the hope of making a kill. These investors will buy stocks now after some stocks have gained about 15 %. They then hope and pray that the stock will continue to move up.
I think it is late to buy now if you have short time trades as an objective.
Friday, 7 November 2008
LINKAGE ASSURANCE TRADES
This is what I like to call smart buying with an intent to sell, bought some stocks at the lowest price of the day and by market close, the stocks are up already 7% on the first day alone. Taking the type of huge outstanding bids for this stock, it will not be surprising to see it gain 20% in the first week alone.
The stock am talking about is Linkage assurance. It was bought at 1.15 and it closed for the day at 1.26. Lets see what next week has to offer us.
The stock am talking about is Linkage assurance. It was bought at 1.15 and it closed for the day at 1.26. Lets see what next week has to offer us.
STOCK BROKER TRICKS
This is the stage where stock brokers make their billions; this is a time when, if you are not very careful, you will play right into the hands of greedy brokers. More so as they have been starved of action for many months now. Surely, ugly stories will still be heard about another type of internal manipulation.
There are investors that filled purchase orders at market price and without time limit and left such with their brokers, as prices rise, these brokers will now fill such orders and buy for you at the zenith of the rise, guess where they will get the shares to sell to you? From their reserves of course, selling to you from the ones they accumulate now and tell you its scarce in the market.
Another type of this same practice is where you fill sell orders and leave with your brokers when prices were still high, like three months ago. There might be no buyers then and you will forget about the order, thinking it has expired. Some unscrupulous brokers, sorry breakers will now get up and sell your three months old orders at 50% less the price you had in mind when trying to sell (remember we were all begging to get the stocks sold, so no limit prices then)
They will be the ones buying the stocks!
There are investors that filled purchase orders at market price and without time limit and left such with their brokers, as prices rise, these brokers will now fill such orders and buy for you at the zenith of the rise, guess where they will get the shares to sell to you? From their reserves of course, selling to you from the ones they accumulate now and tell you its scarce in the market.
Another type of this same practice is where you fill sell orders and leave with your brokers when prices were still high, like three months ago. There might be no buyers then and you will forget about the order, thinking it has expired. Some unscrupulous brokers, sorry breakers will now get up and sell your three months old orders at 50% less the price you had in mind when trying to sell (remember we were all begging to get the stocks sold, so no limit prices then)
They will be the ones buying the stocks!
Thursday, 23 October 2008
THE COUNCIL RESTRUCTURES THE EXCHANGE
y Yemi Kolapo and Ifeanyi Onuba
Published: Thursday, 23 Oct 2008
The post of Director-General in the Nigerian Stock Exchange, currently occupied by Ndi Okereke-Onyiuke, may have been abolished.
The scrapping of the position was the high point of a new organisational structure of the NSE approved by its council at a meeting on Friday.
A statement on Wednesday by the council’s Secretary, Mrs. Josephine Igbinosun, however, said that the Exchange would be headed by a Group Chief Executive Officer.
The GCEO, according to the statement, would be assisted by three executive directors that would be in charge of compliance and surveillance, quotations and listings and market operation/IT.
The statement which was silent on the fate of Okereke-Onyiuke came amid calls by stakeholders for government‘s intervention in the crisis currently rocking the Nigerian capital market.
The development however, spurned rumours that Okereke-Onyiuke’s job might be on the line. But the NSE debunked the insinuation, saying the restructuring was a strategic plan that had been on for over five years.
“It is not a new development. There is a terminal age for retirement. She (Okereke-Onyiuke) will leave when she is due for retirement,” the NSE spokesman, Mr. Sola Oni, said in a telephone interview with one of our correspondents.
He, however, declined to speak when asked when Okereke-Onyiuke was due for retirement. Oni added that the NSE DG was very much involved in the restructuring and that the plan had no link whatsoever with the current market crisis.
Okereke-Onyiuke, who was born in 1950, joined the NSE in 1983. She became the DG of the Exchange, a private sector organisation, in 2000.
Had she been in the public sector, she would have been due for retirement in the next two years. Efforts by our correspondents to find out if the post of DG in the NSE had a fixed tenure proved abortive.
Some stockbrokers, who spoke with one of our correspondents on the condition of anonymity, said the restructuring could be a plot to elongate the tenure of Okereke-Onyiuke who also doubles as the Exchange’s Chief Executive Officer.
“A lot of investors are losing their money. Just yesterday (Tuesday), the capital market crisis claimed its first casualty because the managing director of a stock broking firm slumped right inside his office and died. Don‘t be surprised that it might be an indirect way of elongating the tenure of the DG,” one of the stockbrokers said.
The name of the deceased and his company were kept under wraps as at 9pm on Wednesday.
Igbinosun said in her statement that the new structure, approved at the council‘s meeting on Friday, was a consequence of the reorganisation, which the council approved early in 2008.
She added that the restructuring, which was expected to end in December 2010, would involve the transformation of the NSE‘s governance, IT platform and diversification of its listings and market development product offerings into derivatives and exchange traded funds.
The statement said following a diagnostic study of the structure, management and processes of the Exchange by Accenture, the council held a retreat in June 2008 and approved the restructuring plan, which would culminate in the “demutualisation” of the NSE (listing the Exchange on the NSE and other Exchanges).
The statement reads in part, “The transformation process is broken into five distinct and parallel phases. Phase one of the plan, which commenced in June 2008, is the pre-transformation phase, which involves setting up a programme office and appointing a programme manager.
”Phase 11 of the restructuring involves the internal restructuring phase and migrating the NSE into a new operating model.”
It said the execution of the first two phases was in full swing while phase three, which was the most critical, would involve working with identified stakeholders to make the NSE become a diverse and liquid market with a significant number of large, medium and small companies and investors.
The statement added, ”Programme management is phase 1V and will involve ensuring that resources are deployed to all initiatives and managing risks and ensure completion of the project.
”The last phase is the change management phase, which will ensure that all stakeholders understand the implication of the changes on their various businesses, get buy-in and ensure that the change process gets support of investors, stockbrokers and financial regulators such as the Central Bank of Nigeria and the Securities and Exchange Commission.”
However, some capital market operators commended the restructuring, saying it would ensure transparency, stability and vibrancy of the capital market in the long-run.
”What the NSE is doing is a good development, it shows they are being proactive in dealing with future problems but this is not what the market needs right now. Let them save the market from collapse instead of restructuring,” one of them said.
Another, however, said that anything short of the injection of a stabilisation fund into the market would not achieve instant result.
TIGERKENN COMMENTS
Now, it took the death of one big wig to spur these regulators to action, do they know how many 'small' people that have died as a result of this? or do they even care? Many more blood pressures are rising as a result of this, and more deaths may happen if things are not done urgently.
My thinking is that the slow drop is more fatal than the fast drop, like the 5% drops, things will fall faster and rise back faster. There is the feeling of inevitability associated with this 1% drop, you already know your positions are bleeding, you know the bleeding will continue, you know there is nothing you can do about it, you know the banks will come for your throat.
Why wont somebody drop and die, my surprise is that it took this long for the first person to die!
Published: Thursday, 23 Oct 2008
The post of Director-General in the Nigerian Stock Exchange, currently occupied by Ndi Okereke-Onyiuke, may have been abolished.
The scrapping of the position was the high point of a new organisational structure of the NSE approved by its council at a meeting on Friday.
A statement on Wednesday by the council’s Secretary, Mrs. Josephine Igbinosun, however, said that the Exchange would be headed by a Group Chief Executive Officer.
The GCEO, according to the statement, would be assisted by three executive directors that would be in charge of compliance and surveillance, quotations and listings and market operation/IT.
The statement which was silent on the fate of Okereke-Onyiuke came amid calls by stakeholders for government‘s intervention in the crisis currently rocking the Nigerian capital market.
The development however, spurned rumours that Okereke-Onyiuke’s job might be on the line. But the NSE debunked the insinuation, saying the restructuring was a strategic plan that had been on for over five years.
“It is not a new development. There is a terminal age for retirement. She (Okereke-Onyiuke) will leave when she is due for retirement,” the NSE spokesman, Mr. Sola Oni, said in a telephone interview with one of our correspondents.
He, however, declined to speak when asked when Okereke-Onyiuke was due for retirement. Oni added that the NSE DG was very much involved in the restructuring and that the plan had no link whatsoever with the current market crisis.
Okereke-Onyiuke, who was born in 1950, joined the NSE in 1983. She became the DG of the Exchange, a private sector organisation, in 2000.
Had she been in the public sector, she would have been due for retirement in the next two years. Efforts by our correspondents to find out if the post of DG in the NSE had a fixed tenure proved abortive.
Some stockbrokers, who spoke with one of our correspondents on the condition of anonymity, said the restructuring could be a plot to elongate the tenure of Okereke-Onyiuke who also doubles as the Exchange’s Chief Executive Officer.
“A lot of investors are losing their money. Just yesterday (Tuesday), the capital market crisis claimed its first casualty because the managing director of a stock broking firm slumped right inside his office and died. Don‘t be surprised that it might be an indirect way of elongating the tenure of the DG,” one of the stockbrokers said.
The name of the deceased and his company were kept under wraps as at 9pm on Wednesday.
Igbinosun said in her statement that the new structure, approved at the council‘s meeting on Friday, was a consequence of the reorganisation, which the council approved early in 2008.
She added that the restructuring, which was expected to end in December 2010, would involve the transformation of the NSE‘s governance, IT platform and diversification of its listings and market development product offerings into derivatives and exchange traded funds.
The statement said following a diagnostic study of the structure, management and processes of the Exchange by Accenture, the council held a retreat in June 2008 and approved the restructuring plan, which would culminate in the “demutualisation” of the NSE (listing the Exchange on the NSE and other Exchanges).
The statement reads in part, “The transformation process is broken into five distinct and parallel phases. Phase one of the plan, which commenced in June 2008, is the pre-transformation phase, which involves setting up a programme office and appointing a programme manager.
”Phase 11 of the restructuring involves the internal restructuring phase and migrating the NSE into a new operating model.”
It said the execution of the first two phases was in full swing while phase three, which was the most critical, would involve working with identified stakeholders to make the NSE become a diverse and liquid market with a significant number of large, medium and small companies and investors.
The statement added, ”Programme management is phase 1V and will involve ensuring that resources are deployed to all initiatives and managing risks and ensure completion of the project.
”The last phase is the change management phase, which will ensure that all stakeholders understand the implication of the changes on their various businesses, get buy-in and ensure that the change process gets support of investors, stockbrokers and financial regulators such as the Central Bank of Nigeria and the Securities and Exchange Commission.”
However, some capital market operators commended the restructuring, saying it would ensure transparency, stability and vibrancy of the capital market in the long-run.
”What the NSE is doing is a good development, it shows they are being proactive in dealing with future problems but this is not what the market needs right now. Let them save the market from collapse instead of restructuring,” one of them said.
Another, however, said that anything short of the injection of a stabilisation fund into the market would not achieve instant result.
TIGERKENN COMMENTS
Now, it took the death of one big wig to spur these regulators to action, do they know how many 'small' people that have died as a result of this? or do they even care? Many more blood pressures are rising as a result of this, and more deaths may happen if things are not done urgently.
My thinking is that the slow drop is more fatal than the fast drop, like the 5% drops, things will fall faster and rise back faster. There is the feeling of inevitability associated with this 1% drop, you already know your positions are bleeding, you know the bleeding will continue, you know there is nothing you can do about it, you know the banks will come for your throat.
Why wont somebody drop and die, my surprise is that it took this long for the first person to die!
Wednesday, 22 October 2008
BANKING SECTOR AS A MINEFIELD
Banking sector has now become the new minefield, navigating through the stocks there will require tact and knowledge. One will not forget in a hurry the wonders of Sterling bank abracadabra, or the banks which their stock prices have fallen below the PO price, the ones that has foreign investment exposure, the ones with the rumour of illiquidity of funds, the ones that has lost all ideas of how to modernize its comatose service delivery, the ones with cowboys as helmsmen, the ones perpetually seeking merger partners.
These and many more reasons should make one to do more that the usual due diligence before buying bank stocks, to avoid financial amputation.
My major worry is that the banks are the most capitalized companies on the NSE, and by extension the sector which will cause the biggest trouble if they fall, they may drag everything down in their wake, like a Tsunami sweeping everything it engulfed back into the ocean.
These and many more reasons should make one to do more that the usual due diligence before buying bank stocks, to avoid financial amputation.
My major worry is that the banks are the most capitalized companies on the NSE, and by extension the sector which will cause the biggest trouble if they fall, they may drag everything down in their wake, like a Tsunami sweeping everything it engulfed back into the ocean.
HEAVY VOLUME FOR NB
Somebody seems to have started stockpiling the shares of NB. Watch the volume trends and you will see that the volume bought today is far greater than the one sold yesterday. They sold 1,712,723 units today while the units sold yesterday was below 100k.
Are some people starting something?
Are some people starting something?
THINK LIKE A MARKET REGULATOR
Instead of relaxing and fearing the market,or mourning our fate, courage dictates that this is the time we should be trying to think in the line of this market regulations and know if we could think along the same line they are thinking, take a set of actions we think they will take because, pretty soon another twist will come into this movie, I hope we be ahead on that curve by the time they set off.
STOCK MARKET RISK
Just like any other thing in life, the stock market comes with its own fair share of risks, but firstly let’s talks of risks as it affects life and businesses. There is no business venture that will not carry its own type of risks. Some businesses are more risky than others. For instance, getting up in the morning and leaving your house to attend to your school or to report to your office will carry some risks, accidents, robberies, fights or other forms of dangers which we all are exposed to on a daily basis.
The seller of commodities in the market will be afraid of losing some goods to thieves. The landlord that owns houses will be afraid of fire outbreaks that can raze down his building, handlers of cash will always be afraid of armed robbers and so on. Somebody once told me that even staying inside your house, sleeping in your bedroom is also risky; in fact the ceiling can collapse on a sleeping man and hurt him seriously, while in the comfort of his own room. Stories have also been told that a man, while easing himself inside the bush, was killed by a vehicle that lost its brake and lost control, ran deep inside the bush to kill an innocent man answering the call of nature, deep inside the bush!
Back to the stock market, a lot of people say the business is more risky than other businesses, and there is a fact to that statement. Investing is all about converting your risk free money into risky assets. The risk involved is that the company you bought their shares can start to perform badly, making losses instead of profits. The share price can start to fall even lower that the amount you bought it for. This will mean that you are making some losses in your investment, at least, in the short term. This could also change very easily, the company may correct their acts and start to make profits, and the share price will start to rise, pulling you into profits.
To make many readers understand more of what stock market risks look like, I will like to compare investing in the stock market as against patting your money in the bank. Let as compare investing in shares with fixing your money in a time deposit account.
Time deposits are a way of making money in the bank, you can bring in some capital and tell the bank to hold it for you for a year and you will discuss with the bank on how much money they will pay you for keeping your money and using it to do bank business for one year. A percentage will be agreed on and you will come back one year later and collect your capital along with the interest the bank agreed to pay you for using your money for a year. Note that this is sure money. Under normal circumstances the bank must pay you your money even if they did not make any profit from using your money to do business. You can see the risk is minimal because the agreed percentage must be paid and there is little chance of you losing your money.
On the other hand an investment in the stock market, most times, will not come with any agreed percentage of how much money you will make from your investments, there are no guarantees that you will receive any dividend or bonus or that your initial investments will grow more that the amount you used in buying the stock. Everything in the stock market is not fixed. That is why a lot of people think it is risky, but for those that know the business, this is the best thing that was ever invented in this world.
The stock market will come with no guarantees but it has beaten most other ways of making money in every way. It has returned so much profit to investors that it has come to stay as a way of life for those that are ready to understand its dynamics. A great American author, Robert Kiyosaki once said that the riskier a business is the more returns it can generate for its owners. Safe money carries no risk, you can dig a hole and hide your money, and it will remain exactly as you left it, many years after you hid it. But if you invest it, it will grow beyond your expectation and continue to grow even after you are old, continue to feed your children and grand children.
The seller of commodities in the market will be afraid of losing some goods to thieves. The landlord that owns houses will be afraid of fire outbreaks that can raze down his building, handlers of cash will always be afraid of armed robbers and so on. Somebody once told me that even staying inside your house, sleeping in your bedroom is also risky; in fact the ceiling can collapse on a sleeping man and hurt him seriously, while in the comfort of his own room. Stories have also been told that a man, while easing himself inside the bush, was killed by a vehicle that lost its brake and lost control, ran deep inside the bush to kill an innocent man answering the call of nature, deep inside the bush!
Back to the stock market, a lot of people say the business is more risky than other businesses, and there is a fact to that statement. Investing is all about converting your risk free money into risky assets. The risk involved is that the company you bought their shares can start to perform badly, making losses instead of profits. The share price can start to fall even lower that the amount you bought it for. This will mean that you are making some losses in your investment, at least, in the short term. This could also change very easily, the company may correct their acts and start to make profits, and the share price will start to rise, pulling you into profits.
To make many readers understand more of what stock market risks look like, I will like to compare investing in the stock market as against patting your money in the bank. Let as compare investing in shares with fixing your money in a time deposit account.
Time deposits are a way of making money in the bank, you can bring in some capital and tell the bank to hold it for you for a year and you will discuss with the bank on how much money they will pay you for keeping your money and using it to do bank business for one year. A percentage will be agreed on and you will come back one year later and collect your capital along with the interest the bank agreed to pay you for using your money for a year. Note that this is sure money. Under normal circumstances the bank must pay you your money even if they did not make any profit from using your money to do business. You can see the risk is minimal because the agreed percentage must be paid and there is little chance of you losing your money.
On the other hand an investment in the stock market, most times, will not come with any agreed percentage of how much money you will make from your investments, there are no guarantees that you will receive any dividend or bonus or that your initial investments will grow more that the amount you used in buying the stock. Everything in the stock market is not fixed. That is why a lot of people think it is risky, but for those that know the business, this is the best thing that was ever invented in this world.
The stock market will come with no guarantees but it has beaten most other ways of making money in every way. It has returned so much profit to investors that it has come to stay as a way of life for those that are ready to understand its dynamics. A great American author, Robert Kiyosaki once said that the riskier a business is the more returns it can generate for its owners. Safe money carries no risk, you can dig a hole and hide your money, and it will remain exactly as you left it, many years after you hid it. But if you invest it, it will grow beyond your expectation and continue to grow even after you are old, continue to feed your children and grand children.
Sunday, 19 October 2008
HOW WILL THIS WEEK TRADE.
Are there any reasons for us to cautiously predict that the days of stock price slide is coming to an end? I am just trying to look at this week and from the little I could piece together, some PEs has gotten too low, banks like Access, Diamond, Oceanic and some other companies like NB, NBC, DSR, ETC has got good prices and unbelievable prospects.
Do you think we might start to see a reversal or is it going to be a week just like the others, where it will be considered a good trading day if 3 companies gain in a day.
Do you think we might start to see a reversal or is it going to be a week just like the others, where it will be considered a good trading day if 3 companies gain in a day.
Thursday, 16 October 2008
THE GOING GETS TOUGH
When the going gets tough, only the tough gets going. It will be wrong for us to concede victory to the bears, have we all run away from them bears? I know we will have them for breakfast when all this is over. Trading must go on, no matter what the market does.
Let this lull be your time to learn more tricks to use when the market rebounds. Watch what is unfolding because it will happen again, oh yes, the past always repeats itself. For those that will be ready when the market decides to race up, good profits will be their portion.
Always remember to make a plan and follow it despite the fickle mindedness of the market.
CHEER UP, IT IS NOT OVER YET.
Let this lull be your time to learn more tricks to use when the market rebounds. Watch what is unfolding because it will happen again, oh yes, the past always repeats itself. For those that will be ready when the market decides to race up, good profits will be their portion.
Always remember to make a plan and follow it despite the fickle mindedness of the market.
CHEER UP, IT IS NOT OVER YET.
Wednesday, 8 October 2008
FCMB PROFITS UP BY 154%
By Udeme Ekwere
Published: Wednesday, 8 Oct 2008
First City Monument Bank Plc has recorded a 154 per cent increase in its profit after tax for the financial year ended April 30, 2008.
The bank’s post tax profit stood at N15.10bn up from N5.25bn recorded in the similar period of 2007. Its gross earnings for the year under review also rose to N52.82bn from N24.97bn in 2007, representing an increase of 112 per cent.
Speaking at the company’s 25th Annual General Meeting in Lagos on Tuesday, the Chairman of the bank, Mr. Jonathan Long, attributed the impressive performance of the company to management commitment to growing shareholder value.
“We have delivered impressive financial results and I believe that we have met the earlier promises made to you during the period under review, while at the same time achieving the crucial strategic objectives which the management had set for itself.”
The bank also declared a total dividend payout of N8.1bn, translating to a 50 kobo dividend per every 50 kobo share, held by shareholders registered in the books of the bank as at September 19, 2008.
“We are confident that we will continue to operate in a stable and encouraging business environment and that as a bank, we are well positioned to expand further, whilst maintaining our tradition of excellence,” he stated.
Long expressed the bank’s commitment to continue to pursue new business openings that were capable of generating sustainable growth for the bank in the coming years.
The company’s Earnings Per Share has also increased by 115 per cent from 63 kobo in 2007 to 135 kobo, while its total assets grew by 78 per cent to N467bn up from N263bn recorded in 2007.
Also speaking at the event, the Chief Executive Officer of the bank, Mr. Ladi Balogun, said that the company remained focused on attaining market leadership in the areas of investment banking, consumer banking and transaction banking.
“We have successfully established a formidable distribution network, with 140 branches and over 1,000 sales agents and comprehensive product set with wealth management being inaugurated in 2008. This points to our ability to sustain a robust and rapid growing earnings which we expect to maintain,” he said.
He said the bank would be inaugurating its wealth management offering which was bound to take the company by leaps and bounds in the coming years
Published: Wednesday, 8 Oct 2008
First City Monument Bank Plc has recorded a 154 per cent increase in its profit after tax for the financial year ended April 30, 2008.
The bank’s post tax profit stood at N15.10bn up from N5.25bn recorded in the similar period of 2007. Its gross earnings for the year under review also rose to N52.82bn from N24.97bn in 2007, representing an increase of 112 per cent.
Speaking at the company’s 25th Annual General Meeting in Lagos on Tuesday, the Chairman of the bank, Mr. Jonathan Long, attributed the impressive performance of the company to management commitment to growing shareholder value.
“We have delivered impressive financial results and I believe that we have met the earlier promises made to you during the period under review, while at the same time achieving the crucial strategic objectives which the management had set for itself.”
The bank also declared a total dividend payout of N8.1bn, translating to a 50 kobo dividend per every 50 kobo share, held by shareholders registered in the books of the bank as at September 19, 2008.
“We are confident that we will continue to operate in a stable and encouraging business environment and that as a bank, we are well positioned to expand further, whilst maintaining our tradition of excellence,” he stated.
Long expressed the bank’s commitment to continue to pursue new business openings that were capable of generating sustainable growth for the bank in the coming years.
The company’s Earnings Per Share has also increased by 115 per cent from 63 kobo in 2007 to 135 kobo, while its total assets grew by 78 per cent to N467bn up from N263bn recorded in 2007.
Also speaking at the event, the Chief Executive Officer of the bank, Mr. Ladi Balogun, said that the company remained focused on attaining market leadership in the areas of investment banking, consumer banking and transaction banking.
“We have successfully established a formidable distribution network, with 140 branches and over 1,000 sales agents and comprehensive product set with wealth management being inaugurated in 2008. This points to our ability to sustain a robust and rapid growing earnings which we expect to maintain,” he said.
He said the bank would be inaugurating its wealth management offering which was bound to take the company by leaps and bounds in the coming years
OCEANIC BANK GROWS PROFITS BY 101%
By Udeme Ekwere
Published: Wednesday, 8 Oct 2008
Oceanic Bank International Plc has reported significant growth in its performance indicators for the 12 months ended September 30 2008 with gross earnings hitting N150.9bn.
According to the bank’s unaudited results recently approved by the Nigerian Stock Exchange, the company’s gross earnings rose by 101 per cent compared to N74.94bn recorded in the corresponding period in 2007.
A statement from the bank on Tuesday showed that its profit before tax increased by 127 per cent to N52.23bn in contrast to N23.01bn posted at the preceding year, while its bank’s profit after tax increased by 135 per cent to N41.24bn in contrast to N17.54bn in 2007.
Speaking on the fourth quarter result, the Chief Executive Officer of the bank, Mrs. Cecilia Ibru, said the high turnover and profitability were the manifestation of strategies put in place by the management to take the bank to a greater height.
She assured that the bank would ensure bumper returns on investments of its shareholders while rendering the best services available in the industry to its teeming customers. Oceanic, she assured, would be the best bank in all ramifications.
According to the statement, the performance reflects Oceanic Bank’s track record of consistent and superior performances over the years. For instance, the bank earned N106.7bn in the third quarter of 2008 over N47.52bn in the same period in 2007.
Commenting further on the success of the bank’s financials, Ibru attributed the superlative performance to the bank’s solid management, continuous quest for innovations and human capital development. These, she said, were geared towards value-added customer service delivery.
The bank’s achievements so far, according to her, was as a result of through rigorous training and refresher courses organized for the staff and more importantly to the strict adherence of all the Management and staff to the bank’s core values, tagged: TEAMS, an acronym of Transparency, Equal Opportunity, Accountability, Merit and Service Excellence.
Published: Wednesday, 8 Oct 2008
Oceanic Bank International Plc has reported significant growth in its performance indicators for the 12 months ended September 30 2008 with gross earnings hitting N150.9bn.
According to the bank’s unaudited results recently approved by the Nigerian Stock Exchange, the company’s gross earnings rose by 101 per cent compared to N74.94bn recorded in the corresponding period in 2007.
A statement from the bank on Tuesday showed that its profit before tax increased by 127 per cent to N52.23bn in contrast to N23.01bn posted at the preceding year, while its bank’s profit after tax increased by 135 per cent to N41.24bn in contrast to N17.54bn in 2007.
Speaking on the fourth quarter result, the Chief Executive Officer of the bank, Mrs. Cecilia Ibru, said the high turnover and profitability were the manifestation of strategies put in place by the management to take the bank to a greater height.
She assured that the bank would ensure bumper returns on investments of its shareholders while rendering the best services available in the industry to its teeming customers. Oceanic, she assured, would be the best bank in all ramifications.
According to the statement, the performance reflects Oceanic Bank’s track record of consistent and superior performances over the years. For instance, the bank earned N106.7bn in the third quarter of 2008 over N47.52bn in the same period in 2007.
Commenting further on the success of the bank’s financials, Ibru attributed the superlative performance to the bank’s solid management, continuous quest for innovations and human capital development. These, she said, were geared towards value-added customer service delivery.
The bank’s achievements so far, according to her, was as a result of through rigorous training and refresher courses organized for the staff and more importantly to the strict adherence of all the Management and staff to the bank’s core values, tagged: TEAMS, an acronym of Transparency, Equal Opportunity, Accountability, Merit and Service Excellence.
PHB SET TO BUY SPRING BANK
By Udeme Ekwere
Published: Wednesday, 8 Oct 2008
The move by BankPHB to acquire Spring Bank Plc is officially underway, as the shareholders of the former have endorsed the proposal.
At the company’s extraordinary general meeting in Lagos on Tuesday, the shareholders gave full approval to the bank to continue with the process.
As part of the arrangement, the shareholders authorised the directors to allot such number of shares in the capital of the bank not exceeding N10 billion ordinary shares of 50 kobo each, upon such terms as they deem fit, to shareholders of Spring Bank Plc.”
According to the President, Association for the Advancement of the Rights of Nigerian Shareholders, Dr. Faruk Umar, the acquisition would add value to the bank, which would bring about profitability and increase in the bank’s networking.
He, however, decried a recent statement by the House of Representatives that the bank should not acquire Spring Bank, noting that “If a case is before the court, the House of Reps had no jurisdiction over it, or to dictate to the authorities what they are to do.
Speaking on the acquisition, the Chief Executive Officer, BankPHB, Mr. Francis Atuche, said that the bank believed that at the completion of the transaction, BankPHB would emerge one of the top five banks in the country, adding that by the move, shareholders stood to benefit in the short-term, medium-term and long-term.
According to him, with the structures which Spring Bank already had on ground, the move will also serve to increase profitability, as well as the asset base when the bank has acquired it.
Bank PHB has in the last three years emerged as one of Nigeria’s fastest growing banks, growing at an average rate of three times the average growth rate of the Nigerian banking industry and delivering great returns to its shareholders. Analysts generally acknowledge that Bank PHB has offered one of the highest returns to shareholders in the Nigerian banking industry.
Atuche explained that the choice of Spring Bank as its target for acquisition was informed by the fact that the bank possessed some intrinsic value which Bank PHB intended to exploit.
Published: Wednesday, 8 Oct 2008
The move by BankPHB to acquire Spring Bank Plc is officially underway, as the shareholders of the former have endorsed the proposal.
At the company’s extraordinary general meeting in Lagos on Tuesday, the shareholders gave full approval to the bank to continue with the process.
As part of the arrangement, the shareholders authorised the directors to allot such number of shares in the capital of the bank not exceeding N10 billion ordinary shares of 50 kobo each, upon such terms as they deem fit, to shareholders of Spring Bank Plc.”
According to the President, Association for the Advancement of the Rights of Nigerian Shareholders, Dr. Faruk Umar, the acquisition would add value to the bank, which would bring about profitability and increase in the bank’s networking.
He, however, decried a recent statement by the House of Representatives that the bank should not acquire Spring Bank, noting that “If a case is before the court, the House of Reps had no jurisdiction over it, or to dictate to the authorities what they are to do.
Speaking on the acquisition, the Chief Executive Officer, BankPHB, Mr. Francis Atuche, said that the bank believed that at the completion of the transaction, BankPHB would emerge one of the top five banks in the country, adding that by the move, shareholders stood to benefit in the short-term, medium-term and long-term.
According to him, with the structures which Spring Bank already had on ground, the move will also serve to increase profitability, as well as the asset base when the bank has acquired it.
Bank PHB has in the last three years emerged as one of Nigeria’s fastest growing banks, growing at an average rate of three times the average growth rate of the Nigerian banking industry and delivering great returns to its shareholders. Analysts generally acknowledge that Bank PHB has offered one of the highest returns to shareholders in the Nigerian banking industry.
Atuche explained that the choice of Spring Bank as its target for acquisition was informed by the fact that the bank possessed some intrinsic value which Bank PHB intended to exploit.
MARKET REPORT 07/10/2008
By Ifeanyi Onuba
Published: Wednesday, 8 Oct 2008
The downward trend in the capital market continued at Tuesday’s close of transactions as only four out of the 301 listed equities recorded price appreciation.
Specifically, Thomas Wyatt Plc, Associated Bus Company Plc, Nigerian Aviation Handling Company Plc and Dunlop Nigeria Plc were the companies that had their shares entering the gainers chart.
While Thomas Wyatt Plc added 24 kobo to its share price to close at N50.70 per share, Associated Bus Company Plc, NAHCO and Dunlop Nigeria Plc chalked up 11 kobo, five kobo and one kobo to close at N5.90 and N1.48 per share in that order.
On the other hand, blue chip companies recorded significant loses as the shares of Julius Berger Nigeria Plc, Flour Mills Plc and United African Company of Nigeria Plc dropped 72 kobo, 64 kobo and 46 kobo to close at N72.06, N64.33 and N46.35 per share respectively.
However, the insurance sub-sector displaced the banking sub-sector on the activity chart as it accounted for 65 per cent of total turnover.
It traded 357.136 million shares valued at N354.255m in 820 deals. This represented a volume increase of 425 per cent over the 68.306 million shares valued at N116.002m traded the preceding day in 601 deals
Turnover in the sub-sector was largely boosted by activity in the shares of Investment and Allied Assurance Plc, which accounted for 85 per cent of the sub-sector’s turnover and 55 per cent of total turnover. It traded 303.932 million shares valued at N224.909m in 119 deals.
The banking sub-sector followed on the activity chart accounting for 20 per cent of total volume traded. It traded 109.397 million shares valued at N1.433bn in 3,744 transactions, as against the 189.116 million shares valued at N2.175bn traded the preceding day in 2,681 transactions.
The shares of Spring Bank Plc drove turnover in the sub-sector accounting for 31 per cent of volume traded.
The market capitalisation of the listed equities continued its downward trend as it slid by N64bn or 0.7 per cent, from N9.684tn at Monday’s close to N9.620tn
Similarly, the All-Share-Index of the Nigerian Stock Exchange dropped by 0.7 per cent from 45,504.69 to 45,203.93.
In all, investors staked N2.741bn on 550.758 million shares in 8,346 deals. This represented a volume decrease of 26 per cent over the 435.979 million shares valued at N3.461bn traded on Monday in 4,924 deals.
Published: Wednesday, 8 Oct 2008
The downward trend in the capital market continued at Tuesday’s close of transactions as only four out of the 301 listed equities recorded price appreciation.
Specifically, Thomas Wyatt Plc, Associated Bus Company Plc, Nigerian Aviation Handling Company Plc and Dunlop Nigeria Plc were the companies that had their shares entering the gainers chart.
While Thomas Wyatt Plc added 24 kobo to its share price to close at N50.70 per share, Associated Bus Company Plc, NAHCO and Dunlop Nigeria Plc chalked up 11 kobo, five kobo and one kobo to close at N5.90 and N1.48 per share in that order.
On the other hand, blue chip companies recorded significant loses as the shares of Julius Berger Nigeria Plc, Flour Mills Plc and United African Company of Nigeria Plc dropped 72 kobo, 64 kobo and 46 kobo to close at N72.06, N64.33 and N46.35 per share respectively.
However, the insurance sub-sector displaced the banking sub-sector on the activity chart as it accounted for 65 per cent of total turnover.
It traded 357.136 million shares valued at N354.255m in 820 deals. This represented a volume increase of 425 per cent over the 68.306 million shares valued at N116.002m traded the preceding day in 601 deals
Turnover in the sub-sector was largely boosted by activity in the shares of Investment and Allied Assurance Plc, which accounted for 85 per cent of the sub-sector’s turnover and 55 per cent of total turnover. It traded 303.932 million shares valued at N224.909m in 119 deals.
The banking sub-sector followed on the activity chart accounting for 20 per cent of total volume traded. It traded 109.397 million shares valued at N1.433bn in 3,744 transactions, as against the 189.116 million shares valued at N2.175bn traded the preceding day in 2,681 transactions.
The shares of Spring Bank Plc drove turnover in the sub-sector accounting for 31 per cent of volume traded.
The market capitalisation of the listed equities continued its downward trend as it slid by N64bn or 0.7 per cent, from N9.684tn at Monday’s close to N9.620tn
Similarly, the All-Share-Index of the Nigerian Stock Exchange dropped by 0.7 per cent from 45,504.69 to 45,203.93.
In all, investors staked N2.741bn on 550.758 million shares in 8,346 deals. This represented a volume decrease of 26 per cent over the 435.979 million shares valued at N3.461bn traded on Monday in 4,924 deals.
PRICES STILL FALLING
There still is no respite for the falling stocks on the NSE. This is in spite of all the litany of efforts made by the authorities at both the NSE, sec, CBN and other concerned government agencies. The stock market is still on a free fall and views from the closing prices suggest that the bleeding of prices continue unabated.
Experts still blame the 1% max drop of stock prices as the main snag causing multiple go-slows in the stock market. This is because the prices cannot fall as fast as they want it and this makes buyers to delay buying decisions since they know they can buy the stocks cheaper if they wait some few days more.
Others blame the foreign fund administrators for pulling their funds from our markets so suddenly (at least that was the explanation given by our own CBN Gov. C. Soludo.) if things continue like this, investor confidence will be hurt the more.
Experts still blame the 1% max drop of stock prices as the main snag causing multiple go-slows in the stock market. This is because the prices cannot fall as fast as they want it and this makes buyers to delay buying decisions since they know they can buy the stocks cheaper if they wait some few days more.
Others blame the foreign fund administrators for pulling their funds from our markets so suddenly (at least that was the explanation given by our own CBN Gov. C. Soludo.) if things continue like this, investor confidence will be hurt the more.
WILL NIGERIAN BANKS SUFFER HUGE LOSSES?
There is fear in the land! This fear is built on the uncertainty about the banking stocks and their level of financial crisis. This crisis is currently bedeviling the American and European stock markets and financial institutions. Several banks have gotten into stormy waters, closing shop as they could no longer meet up with their legal obligations as the financial problems persist.
The Dow closed at 9446 points yesterday, and there is still no assurance that the 700 billion dollars bail out plan in the US will work. In the Middle East, their markets have started tumbling, oil is getting cheaper by the day and most economists are lowering their ealier projections for this year.
Coming back home, the new fear is that some of our banks are not as healthy as they claim, I have written about this earlier last month. But the persistent fall in the price of banking stocks have not helped matters. The stock prices may be falling in reaction to some insiders trying to sell off their shares, having known that the price is overvalued. Everyone may be running away from bank stocks till we get to know how much exposure they have to the margin facilities.
Lets look at the case of Oceanic bank plc, they published their fourth qtr result for the period ended Sept 2008, in the result, their most recent quarter result was much lower than its second and third quarter results. Is this trend going to repeat itself with the other banks or is this a one-off occurrence? Oceanic bank has also been praised for coming clean of the alleged bad loans, let us keep our fingers crossed.
The Dow closed at 9446 points yesterday, and there is still no assurance that the 700 billion dollars bail out plan in the US will work. In the Middle East, their markets have started tumbling, oil is getting cheaper by the day and most economists are lowering their ealier projections for this year.
Coming back home, the new fear is that some of our banks are not as healthy as they claim, I have written about this earlier last month. But the persistent fall in the price of banking stocks have not helped matters. The stock prices may be falling in reaction to some insiders trying to sell off their shares, having known that the price is overvalued. Everyone may be running away from bank stocks till we get to know how much exposure they have to the margin facilities.
Lets look at the case of Oceanic bank plc, they published their fourth qtr result for the period ended Sept 2008, in the result, their most recent quarter result was much lower than its second and third quarter results. Is this trend going to repeat itself with the other banks or is this a one-off occurrence? Oceanic bank has also been praised for coming clean of the alleged bad loans, let us keep our fingers crossed.
NSE SET TO INTRODUCE 5 MARKET MAKERS
5 Primary Market Makers appointed on Market bailout
Posted Tuesday, October 7, 2008
BY PETER OBIORA
Proshare NI
October 07, 2008 at 16.00 GMT
Five Primary Market Makers has been appointed as part of the bailout plans for the Nigerian Capital Market. A source close to Proshare NI in the meeting held at Nigerian Stock Exchange (NSE) made this confirmation today in Lagos Nigeria.
The bailout plan is part of the measures being proposed to help halt the dwindling fortune of the Nigerian Capital Market.
It is being expected that Private Funds would be injected to help bailout the Capital Market.
The Federal Government (FG) two months ago intervened in the market to halt its dwindling fortune, however, up until now; nothing seems to have happened to alleviate this trend.
Recently, the United States Government (US) had come to a conclusion to inject $700 billion to halt the countries ailing financial health.
This is also coming on the heels of the FG aborting plans to introduce a Stabilisation Fund; which would ensure liquidity in the Nigerian Capital Market.
As at the time of filling in this report, Proshare NI could not get much detail in respect of the meeting by Regulators in the Capital Market on the internal bailout plan proposed to help the FG’s intervention on the market.
However, Regulatory Authorities has defined Market Makers as any company that has up to N2.0 billion Capital Base.
In the same vein, the Quotation Committee of the NSE today in Lagos Nigeria sat to deliberate on listing of 15 companies on the Floors of the nations Stock Exchange
Our source confirmed to Proshare NI that most of the companies got the approval to list mostly Rights Issues and supplementary listing.
“Almost all the companies got approval to list its shares on the Floors of the NSE, but I wouldn’t tell you the number” the source affirmed.
Tomorrow October 08, 2008, Multiverse Resources Plc would be listing 3.0 billion Ordinary Shares of 50 Kobo each at N1.80 Kobo per share.
Posted Tuesday, October 7, 2008
BY PETER OBIORA
Proshare NI
October 07, 2008 at 16.00 GMT
Five Primary Market Makers has been appointed as part of the bailout plans for the Nigerian Capital Market. A source close to Proshare NI in the meeting held at Nigerian Stock Exchange (NSE) made this confirmation today in Lagos Nigeria.
The bailout plan is part of the measures being proposed to help halt the dwindling fortune of the Nigerian Capital Market.
It is being expected that Private Funds would be injected to help bailout the Capital Market.
The Federal Government (FG) two months ago intervened in the market to halt its dwindling fortune, however, up until now; nothing seems to have happened to alleviate this trend.
Recently, the United States Government (US) had come to a conclusion to inject $700 billion to halt the countries ailing financial health.
This is also coming on the heels of the FG aborting plans to introduce a Stabilisation Fund; which would ensure liquidity in the Nigerian Capital Market.
As at the time of filling in this report, Proshare NI could not get much detail in respect of the meeting by Regulators in the Capital Market on the internal bailout plan proposed to help the FG’s intervention on the market.
However, Regulatory Authorities has defined Market Makers as any company that has up to N2.0 billion Capital Base.
In the same vein, the Quotation Committee of the NSE today in Lagos Nigeria sat to deliberate on listing of 15 companies on the Floors of the nations Stock Exchange
Our source confirmed to Proshare NI that most of the companies got the approval to list mostly Rights Issues and supplementary listing.
“Almost all the companies got approval to list its shares on the Floors of the NSE, but I wouldn’t tell you the number” the source affirmed.
Tomorrow October 08, 2008, Multiverse Resources Plc would be listing 3.0 billion Ordinary Shares of 50 Kobo each at N1.80 Kobo per share.
BANKS PLANNING TO INJECT 600 BILLION INTO STOCK MARKET
By Goddy Egene and Eromosele Abiodun, 10.08.2008
Strong indications emerged yesterday that the Council of the Nigerian Stock Exchange (NSE) may have made a head way in its efforts to bail out the nation’s stock from its lingering slide.
This followed an agreement reached between the Council of the NSE and some banks to inject N600 billion into the market.
The Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, had last Monday said a meeting would be held between the Exchange and the Securities and Exchange Commission (SEC) as part of fresh efforts to find a solution to the falling share prices.
However, SEC officials were not at yesterday’s meeting that was held in Lagos.
A source close to SEC said that while the Commission was in support of efforts to bail out the stock market, it was not aware of the latest arrangement.
But THISDAY gathered that the part of the bail-out package discussed yesterday include an arrangement that would lead to the appointment of six banks to act as major “Market Makers”. The banks would then provide N100 billion each to buy up to 15 per cent of their shares from the market.
Although any company can be licensed under the guidelines issued by SEC for operators to become Market Makers, it was gathered that the NSE may have encouraged banks to take the lead.
A source said that the thinking is that given the financial muscle of the banks, they would easily meet the minimum capital requirement of N2 billion stipulated by SEC.
“The banks, working according to the guidelines issued by SEC, will provide funds to mop up shares from the market and sell the same shares whenever the need arises,” a source said.
Capital market operators said that given the current capitalisation of banks and the urgency to bail out the nation’s stock market, banks are in a good position to play as Market Makers by floating subsidiaries that would do so.
The SEC’s rules define Market Maker as “Any specialist permitted to act as a dealer, any dealer acting in the position of a block positioner, any dealer, who with respect to a security, holds himself out as being ready to buy and sell such securities for his own account on a regular and continuous basis”.
The Market Maker shall be a company duly registered with Corporate Affairs Commission (CAC) and shall have a minimum paid-up capital of N2 billion. A Market Maker is required to at all times maintain sufficient liquid assets to cover its current indebtedness.
Obligations of the Market Maker include: stabilisation of the market by ensuring continuous liquidity by synchronising buy and sell transactions of a security; operate within the established transaction spread (that is bid/offer spread) which shall be a maximum limit of three per cent and subject to review from time to time.
Also, the Market Maker will have the capacity for continuous two-way quotes in the relevant stocks through the trading session in a minimum quote size of 100,000 units of shares and must have the capacity to deliver and settle transactions within the prescribed settlement cycle of T+3. The Market Maker must equally have the capacity to lend and borrow the designated securities at any time, with a view to ensuring stability in the market among others.
Meanwhile, worried by the worsening global financial meltdown, the Senate will today consider a motion on the issue and its impact on Nigeria.
The motion, entitled: “Global Credit Crisis and its impact on Nigeria”, is being sponsored by Senator Anthony Manzo with 18 co-sponsors.
In the motion, listed on yesterday’s notice paper, the sponsor noted that the wave of the global financial crisis sweeping through United States of America and Europe was the first financial crisis of the 21st century.
If the Senate throws its weight behind motion, commendation may come the way of the Central Bank of Nigeria (CBN) for the quick intervention by injecting N1 trillion into the economy.
Strong indications emerged yesterday that the Council of the Nigerian Stock Exchange (NSE) may have made a head way in its efforts to bail out the nation’s stock from its lingering slide.
This followed an agreement reached between the Council of the NSE and some banks to inject N600 billion into the market.
The Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, had last Monday said a meeting would be held between the Exchange and the Securities and Exchange Commission (SEC) as part of fresh efforts to find a solution to the falling share prices.
However, SEC officials were not at yesterday’s meeting that was held in Lagos.
A source close to SEC said that while the Commission was in support of efforts to bail out the stock market, it was not aware of the latest arrangement.
But THISDAY gathered that the part of the bail-out package discussed yesterday include an arrangement that would lead to the appointment of six banks to act as major “Market Makers”. The banks would then provide N100 billion each to buy up to 15 per cent of their shares from the market.
Although any company can be licensed under the guidelines issued by SEC for operators to become Market Makers, it was gathered that the NSE may have encouraged banks to take the lead.
A source said that the thinking is that given the financial muscle of the banks, they would easily meet the minimum capital requirement of N2 billion stipulated by SEC.
“The banks, working according to the guidelines issued by SEC, will provide funds to mop up shares from the market and sell the same shares whenever the need arises,” a source said.
Capital market operators said that given the current capitalisation of banks and the urgency to bail out the nation’s stock market, banks are in a good position to play as Market Makers by floating subsidiaries that would do so.
The SEC’s rules define Market Maker as “Any specialist permitted to act as a dealer, any dealer acting in the position of a block positioner, any dealer, who with respect to a security, holds himself out as being ready to buy and sell such securities for his own account on a regular and continuous basis”.
The Market Maker shall be a company duly registered with Corporate Affairs Commission (CAC) and shall have a minimum paid-up capital of N2 billion. A Market Maker is required to at all times maintain sufficient liquid assets to cover its current indebtedness.
Obligations of the Market Maker include: stabilisation of the market by ensuring continuous liquidity by synchronising buy and sell transactions of a security; operate within the established transaction spread (that is bid/offer spread) which shall be a maximum limit of three per cent and subject to review from time to time.
Also, the Market Maker will have the capacity for continuous two-way quotes in the relevant stocks through the trading session in a minimum quote size of 100,000 units of shares and must have the capacity to deliver and settle transactions within the prescribed settlement cycle of T+3. The Market Maker must equally have the capacity to lend and borrow the designated securities at any time, with a view to ensuring stability in the market among others.
Meanwhile, worried by the worsening global financial meltdown, the Senate will today consider a motion on the issue and its impact on Nigeria.
The motion, entitled: “Global Credit Crisis and its impact on Nigeria”, is being sponsored by Senator Anthony Manzo with 18 co-sponsors.
In the motion, listed on yesterday’s notice paper, the sponsor noted that the wave of the global financial crisis sweeping through United States of America and Europe was the first financial crisis of the 21st century.
If the Senate throws its weight behind motion, commendation may come the way of the Central Bank of Nigeria (CBN) for the quick intervention by injecting N1 trillion into the economy.
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