Economic uncertainties and slowdown of market activities have continued to weaken investors’ appetite for equities on the floor of the Nigerian Stock Exchange (NSE) as the All-Share Index and market capitalisation depreciated further by 0.6%. Specifically, at the close of transactions last week, the market capitalistaion, which stood at N13.637 trillion when the market reopened for transactions on July 9, lost N94 billion or 0.6 per cent, to close at N13.545 trillion at the weekend. Also, the ASI depreciated by 255.16 points from 37,647.93 to 37,392.77.
Furthermore, turnover of 1.219 billion shares worth N17.333 billion were recorded in in 17,362 deals by investors on the floor of the Exchange lower than 1.842 billion shares valued at N16.594 billion that changed hands in 18,941 deals during the preceding week.
Similarly, all other indices finished lower with the exception of the NSE oil/gas and the NSE Lotus II Indices that appreciated by 0.71 per cent and 0.37 per cent respectively.
Analysts attributed the downturn to the impact of 2019 elections and ongoing security challenges that have bedeviled the nation’s political space.
For instance, the Chief Reseatch Officer of Investdata Consulting Limited, Ambrose Omodion, said: “The unfolding events regarding weekend’s Ekiti State governorship election confirm the fears among investors and analyst.
“For many, happenings around the July 14, 2018, election continue to feed the polity with unnecessary wrong signals that none of the regulators or government is doing much to play down, ahead of general election in 2019. “We expect a slowdown in the decline that leads to reversal soon as Q2 earnings season kicks off any moment from now, since equities remain undervalued with higher yields. Investors should review their position in line with their investment goals and act as events unfolds in the global and domestic environment.
“However, we would like to reiterate our advice that investors should go for equities with intrinsic value, especially during this season were Q2 interim dividend payment are expected in the market arena very soon.” Analyst at Codros Capital Limited said the continued selloffs and the absence of a near term one-off positive catalyst dampen the outlook for equities in the short-to-medium term, adding that strengthened macroeconomic fundamentals remain supportive of gains in the long term.
Vetiva Research Limited said: ”With market sentiments staying negative after a week of bearish trading, we expect the tepid sentiments to filter into the market at week’s opening.” Further breakdown of last week’s trading showed that the financial services Industry led the activity chart with 842.823 million shares valued at N9.587 billion, traded in 9,231 deals; thus contributing 69.15 per cent to the total equity turnover volume. The consumer goods industry followed with 113.667 million shares worth N4.657 billion in 3,120 deals, while the services industry ranked third with a turnover of 105.623 million shares worth N519.813 million in 593 deals. Trading in the top three equities- Access Bank Plc, Zenith International Bank Plc and Nigerian Aviation Handling Company Plc accounted for 497.482 million shares worth N6.619 billion in 2,251 deals, contributing 40.82 per cent to the total equity turnover volume.
Also traded during the week were 79,304 units of Exchange Traded Products (ETPs) valued at N1.491 million and executed in 18 deals, compared with 25,220 units valued at N454,438.90 that were transacted last week in four deals. A total of 13,517 units of Federal Government valued at N14.899 million was traded this week in 30 deals, compared with a total of 2,359 units valued at N2.188 million transacted last week in 24 deals.
Credit: The Guardian
After 25 years of operations that kicked off in Abuja, the African Export-Import Bank (Afreximbank) said it has mobilised no fewer than $65 billion worth of loan syndications for trade financing and the development of the continent’s economies.
Nigeria, as a major stakeholder and contributor to the pan-African largest multilateral lender, has received about 40 per cent of the bank’s interventions, covering public investments and private sector working capital, particularly, the banks.
Today, while Nigeria and the rest of the African economies are still battling with financing challenges, the question of what it would have been like for the continent, without the emergence of the bank remains at large.
Meanwhile, the bank noted that there is as much as $120 billion in trade finance gap that needs to be closed; yearly $93 billion trade infrastructure gap; and a global trade share at three per cent, that needs to be raised; while Intra-African trade is still far below aspirations.At the weekend, during the yearly meetings of Afreximbank, part of the $65 billion syndications was injected further into Nigeria’s economy, as the Bank of Industry signed for a $750 million facility for on lending to small businesses.
Also, Aliko Dangote, signed a $650 million loan facility with the for an oil refinery project in Lekki, Nigeria, on a seven-year term loan, with five years moratorium.The government received a provision of $1.8 billion to support the economy during the recent oil price shock between 2015 and 2016, while a provision of liquidity and trade finance lines of more than $800 million was made during the banking consolidation when many international banks cut credit lines to the country.
Currently, Afreximbank’s initiatives in Nigeria include the development of testing and inspection centres across the country in collaboration with the Standards Organization of Nigeria; and establishment of a Centre of Excellence for Tertiary Healthcare/Medical Park.There is ongoing talks to participate in the Nigeria SEZ Investment Company Limited being promoted by the government; the support for industrial projects through loans to strategic banks; provision of trade and letter of credit lines to all Nigerian banks, in close coordination with Central Bank of Nigeria; and development of an Afreximbank Africa Trade Centre in Abuja.
The bank’s President, Dr. Benedict Oramah, told The Guardian that the emergence of the bank was in reaction to challenge by an unprecedented debt crisis that ravaged the continent like a plague those days and as a child of necessity, was conceived for Africa and by Africans and now effectively delivered by Africans.So far, the bank has provided over $50 billion, granted in support of trade and project activities across Africa, supported the emergence of world class hotels across the continent, including upscaling facilities in Island economies like Cape Verde and Seychelles.
The bank prevented the implosion of Zimbabwe by providing an aggregate of about $4 billion to avert hunger and support critical businesses when virtually all international banks cut off the country.“Who would today have stepped in to provide trade services lines in excess of 4 billion to about 500 banks across Africa so that no country can be denied access to trade finance as a result of high compliance cost?
“Who would have supported connectivity among African markets by leveraging close to $3 billion in support of African airline operations?“How would some indigenous Nigerian entities have been able to acquire oil production acreages if the Bank had not stand by them?“Who would have financed the creation of at least 130 thousand metric tonnes of cocoa processing capacity in Cote d’Ivoire and revived processing plants in other major producing countries, namely Ghana and Nigeria?“Who would have provided $9 billion to a number of African central banks and commercial banks at the height of the commodity price induced crises of 2014-16?” he queried.Oramah said Afreximbank is powering the Collective Will of the Continent to boost intra-regional trade and export manufacturing and now about to launch a pan-African payment and settlement platform in support of intra-African trade.
Already, there are SMEs operating in export supply chains with hopes of improved access to finance as a result of the bank’s efforts to promote factoring, such that from almost nothing, Africa can today boast of 32 factoring companies sharing in near trillion dollar global market.President Muhammadu Buhari, while declaring open the bank’s yearly meetings, in Abuja, at the weekend, commended Afreximbank’s strategy in the continent through its dynamism and tenacious leadership, saying the lender had proved that Africans could come together to build something meaningful.
While delivering his keynote address, he said that those attributes had enabled the bank to record the successes so far since its establishment 25 years ago.He noted that the bank’s efforts to integrate Africa through its African Continental Free Trade Area (AfCFTA), is already undergoing a careful review, with several consultations to get the inputs of the nation’s diversed professionals, entrepreneurs and investors.South African President, Cyril Ramaphosa, who attested to the portents of AfCFTA, being driven by Afreximbank, when adopted, would provide the integrated and diversified markets that will unlock Africa’s full productive capacity.He lamented that “intra-African trade is only 15 per cent of Africa’s total trade, compared to Europe’s 67 per cent and we need a sustained strategic shift to industrialisation, increased Intra-African trade, and de-commoditisation through increased value addition and export diversification.”
Afreximbank’s Chief Economist, Dr. Hippolyte Fofack, said: “The AFCFTA must emphasise policies promoting export diversification for each member country. In addition, efforts must be increased to motivate more technology-intensive manufactured goods.“Given the current average technology and skill content in Intra-African trade, the AFCFTA seems to be well positioned to help achieve and deliver more technology-intensive manufactured goods.”
The Minister of Finance, Kemi Adeosun, said that continued infrastructure improvements and a focus on trade, particularly regional trade, would drive sustainable growth.Adeosun commended Afreximbank for its role during the last global recession when it supported many African countries with trade support and lines of credit at a time when others were withdrawing from Africa.
Credit: The Guardian
Shareholders of Cadbury Nigeria Plc on Friday approved N301.51 million as total dividend for the financial year ended Dec. 31, 2017.
The shareholders gave the approval at the company’s 53rd Annual General Meeting (AGM) in Lagos.
The News Agency of Nigeria (NAN) reports that the dividend, which will be paid on July 9, translated to 16k per share.
Speaking at the meeting, Mr Emmanuel Popoola , a shareholder, commended the company for the dividend declared and return to profitability in spite of the challenging operating environment. Popoola urged the company to work harder to ensure enhanced dividends in the years ahead.
Mr Taiwo Oderinde, another shareholder, urged the company introduce new products to increase its market share and bottom line.
Oderinde said the company should target products that would address the health issues in the country such as diabetes.
He also called on the company to look for cheaper means of financing its activities to reduce costs of operation.
Oderinde advised the company to work toward floating rights issue in the future to raise fresh capital instead of obtaining bank loans.
Responding, Mr Atedo Peterside, the company’s Chairman, said the company was working on some new products, which would be launched at the appropriate time.
Peterside said the company built its business on four key pillars, such as price competitiveness, aggressive route to market initiatives and sustained consumer-driven activations.
He said the company’s top priorities in the current year were to sustain focus on quality, drive improvements in productivity and reinforce operational efficiency to maximise its competitive advantage.
The chairman added that the company would drive growth ahead of competition to increase market share within its product categories.
The company, during the period under review, recorded a revenue of N33.08 billion compared with N29.98 billion in 2016.
It also benefited from cost savings initiatives, which saw selling and distribution costs as well as administrative costs decline by seven per cent and 23 per cent respectively.
Its profit before tax stood at N350.32 million from a loss before tax of N562. 87 million recorded in the previous year.
Profit for the year stood at N299. 99 million against a loss of N296. 40 million in 2016.
The company said revenue contribution for the 2017 financial year came from 55 per cent refreshment beverages which includes Bournvita and Cadbury 3-in-1 hot chocolate.
It stated that 31 per cent was from confectioneries such as Tom-Tom peppermint and its variants, while 14 per cent of the revenue came from Intermediate Cocoa products comprising cocoa powder, cocoa cake and cocoa butter.