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Starcomms & Cadbury Plc Updates.

Starcomms Plc blazes the trail on the telecommunication sub sector.

Starcomms Plc, a telecommunications outfit, was commercially launched in 1999 and its deployment of the world class CDMA technology in 2002 has exponentially taken the company to its current position of over 1,000,000 customers in Lagos, Kano, Maiduguri, Port-Harcourt, Ibadan, Abuja, Aba,Onitsha, Asaba, Kaduna, Zaria and Benin. In 2002 the company introduced a revolutionary marketing strategy aimed at permanently changing the fixed/wireless industry for the better. The strategy focused on the need to improve customer service quality and network performance.

The company took additional strides as the leading PTO in December 2003 when it deployed an Intelligent Network technology in Nigeria. History was made in December 2003 when Starcomms introduced its Intelligent Network, the next generation of wireless services, in Kano, Nigeria. Starcomms has maintained a distinct business approach that combines technological novelty and excellence with good customer orientation and a unique branding concept that stands it out amongst pairs. The company, which is managed by a team of professionals led by the Chief Executive Officer, Mr. Maher Qubain, holds strategic alliances with Qualcomm, CDG, Huawei, Hisense, Harris, Haier, LG and Nera to provide cutting edge technological equipments to deliver on its service promise.

Starcomms made its debut in the telecommunications sub sector of the Nigerian Stock Exchange last week by listing a total of 6.9 billion ordinary shares of 50 kobo each at N13.65 per share by way of introduction.

Cadbury Plc placed on full suspension

Recent developments have revealed that the last has not been heard of the Cadbury Plc’s financial misstatement saga that was uncovered about two years ago, involving its former Managing Director, Financial Controller and some other principal officers. The Investment and Securities Tribunal, last week enforced a full suspension sanction on the company’s shares. This sanction was initially intended by the Securities and Exchange Commission, but countered by the Nigerian Stock Exchange for lack of a legal backing. However, the Investment and Securities Tribunal, a court of competent jurisdiction on investment matters has imposed the penalty, leaving the Nigerian Stock Exchange with no other option but to consent.

Nevertheless, Cadbury Plc has stated that ever since the misstatement matters came into the limelight, the company had consistently cooperated with the regulators, and would continue to search for justice through the law courts.

First Registrars notifies investors on 17 offers of companies

-set to reissue certificates within 7 days
First Registrars Nigeria Limited had notified investors who took part in 17 different offers of its client companies; on the non-receipt of their share certificates, return money and interest warrants; as it is set to reissue certificates within seven days.

Niran Adetunji, Head, Finance & Accounts of the company affirmed this to Proshare NI today in Lagos Nigeria.

Adetunji affirmed that First Registrars is ready to package an indemnity to investors who had not yet received their share certificates from the recent offers handled by it for their various client companies.

“For those who have not yet received their share certificates for the various companies we have handled their offers as Registrars, they should send a formal letter and we would package an indemnity for them within seven days and issue them the duplicate” he said.

A list of the companies as published in First Registrars notice to investors in about 10 dailies; Adetunji affirmed include ARM Aggressive Growth Fund, Platinum Habib Bank Plc (Bank PHB) Costain West Africa Plc, DEAP Capital Management and FBN Heritage Fund offers of 2007 respectively.

Others are Fidelity Bank Plc’s 2005 offer and 2007 Rights/offer respectively, First Bank of Nigeria Plc’s (FBN’s) 2003 Rights and 2007 Rights/offers respectively.

On the list is also StanbicIBTC Ethical Fund offer of 2005, StanbicIBTC Bank offer 2005, Kakawa Guaranteed Income Fund offer 2007, Oando Plc’s Rights/offer of 2004.

There are also the Oasis Insurance Plc’s Rights/offer of 2007, Prestige Assurance Plc’s and Standard Alliance Insurance Plc’s offers of 2006 respectively and the IBTC Guaranteed Investment Fund offer of 2007.

The above is a total of 17 offers from different companies. Adetunji further affirmed to Proshare NI that First Registrars would reissue physical share certificates or direct crediting to the investors Central Security Clearing System Limited (CSCS) accounts; if furnished and indicated while filling the indemnity form.

He also confirmed to Proshare NI that the Committee set up by Securities & Exchange Commission (SEC) on the issue of Infrastructure upgrade and monitoring of Registrars to ensure market transparency; visited First Registrars unnoticed.

Adetunji further confirmed to Proshare NI that the Committee was satisfied with the infrastructure put in place by First Registrar to run its operations.

Some of the facilities on ground, Adetunji affirmed include three Data Capturing Machines, Scanner for converting forms to data and a Call Centre

Intl Energy Insurance to raise N10bn fresh funds

International Energy Insurance Plc (IEI) is to approach the Nigerian Capital Market to raise fresh funds of N10 billion. Jacob Erhabor, Managing Director/ Chief Executive Officer (MD/CEO) of the company made this affirmation to Proshare NI in Lagos Nigeria.

“IEI is proposing to raise additional funds of N10 billion, it is on the table and we are trying to conclude with the plans” Erhabor said.

He affirmed that the offer would likely open before the end of the current quarter. “Before the end of this quarter, we should actualise it” he said.

As at the time of filling in this report, Erhabor confirmed to Proshare NI that the offer price has not yet been fixed; as it is a function of a number of issues.

“I would not want to make a guess as regards the offer price; it has to be based on certain fundamentals” he affirmed.

He however, confirmed to Proshare NI that IEI has not gone to the Quotations Committee of the Nigerian Stock Exchange (NSE) to present its proposal of raising fresh funds. “There are so many things to be put in place” Erhabor said.

“Today, I can assure you that IEI has about N12 billion to do its business successfully” he affirmed.

The company was subsequently recapitalised to N500 million to meet with the challenges of its new business focus. IEI has since increased its authorised share capital to N6, 000,000,000 comprising of 12,000,000,000 ordinary shares of 50 kobo”

In the same vein, the insurance company has proposed to give its investors a 0.9 Kobo dividend payout in its current Financial Year End (FYE).

Erhabor further confirmed to Proshare NI, that the 0.9 Kobo dividend payout being proposed to investors; is the beginning of good returns to their investment in the company.

However, the 0.9 Kobo dividend is subject to the approval of the company’s Board at its forthcoming Annual General Meeting (AGM).

Also, as at the time of filling in this report, Proshare NI could not gather further details concerning the proposed N10 billion Public Offer (PO) of IEI.

NGC declares 45 kobo dividend

Nigerian-German Chemicals Plc has declared a dividend of 45 kobo, amounting to N69m for shareholders in its 2007 financial results.

This represents an increase by 29 per cent over the 35 kobo paid in 2006.

The company recorded a turnover of N2.63bn, representing an increase by 5.6 per cent over N2.49bn recorded the previous year. Its profit after tax, however, fell by 22 per cent to N56.9m from N73.3bn in 2006.

Speaking at the company’s annual general meeting on Tuesday, The National Chairman, Dynamic Shareholders Association of Nigeria, Mr. Alex Adio, congratulated the board of the company for its results, and hoped that by the next financial year, the company would perform better.

“Shareholders are impressed that although the profit you recorded this year was lower than that of last year, you still declared a higher dividend,” he said.

Also speaking, the President, Shareholders Solidarity Association, Chief Timothy Adesiyan, stated that the company should ensure the utilisation of its infrastructure in order to enhance productivity.

He urged the management to look into the amount spent on energy, stating that it was on the high side.

The company should look for a solution to the problem, he said.

The Chairman, NGC, Alhaji Shehu Idris, in his response, stated that the company had strategies in place for the next financial year to ensure profitability.

Idris, who was represented by the company’s Vice Chairman, Mr. Adeboye Shonekan, said , owing to this, the company would be seeking to raise fresh capital through a hybrid of rights and bond issues.

UBA Declares N28.85 Billion Profit After Tax

United Bank for Africa Plc (UBA)’s third quarter unaudited results for its 2008 financial year, shows that the Bank is well on track to meeting and surpassing the expectations of its numerous stakeholders.

Drawing inference from the disclosed figures, stakeholders of the bank can be certain of another rewarding year for their investments in the financial institution.

The unaudited results, recently released to the Nigerian Stock Exchange, show a 59.8 per cent increase in the bank’s earnings and growth in its market share. Gross Earnings for the 6 months under review was N120.25 billion, a N45 billion appreciation over the N75.25 billion recorded for the corresponding period last year. This significant increase in earnings, can be attributed to increased customer-patronage resulting from the quality of service and products offered by the bank.

Profit before tax appreciated by 68.31 per cent, with the bank reporting a N33.14 billion PBT in comparison with the N19.69 billion reported last year. The bank’s N28.85 billion profit after tax for the 6 months under review, is also a 6668.42 per cent appreciation over the figure reported last year.

According to financial analysts and industry watchers, the bank’s first quarter results are an indication of good times for its shareholders, if dividend payout for the last financial year are anything to go by.

Bank’s results with that of its peers, shows that it had emerged as the fastest growing in the country.

Nse Market Report For Week 28 (july 11)

A turnover of 5.8 billion shares worth N42.12 billion in 88,146 deals was recorded this week, in contrast to a total of 4.8 billion shares valued at N41.96 billion exchanged last week in 77,288 deals.

Transactions during the week included a total of 1,000 units of Access Bank Plc N13.5 billion Redeemable Bond 2010 valued at N1 million.

There were no transactions in the Federal Government Development Stocks, State Government Bonds and Industrial Loans/Preference Stocks sectors.

The Insurance subsector was the most active during the week (measured by turnover volume), with 3.83 billion shares worth N4.6 billion exchanged by investors in 16,880 deals. Volume in the Insurance subsector was largely driven by activity in the shares of Investment and Allied Assurance Plc. Trading in the shares of the Insurance Company accounted for 3.31 billion shares, representing 86.35% of the subsector’s turnover.

The Banking subsector, boosted by activity in the shares of Fidelity Bank Plc, Intercontinental Bank Plc and FirstInland Bank Plc, followed on the week’s activity chart with a turnover of 1.5 billion shares valued at N30.25 billion in 40,848 deals.

Last week, the Insurance subsector led on the activity chart and was followed by the Banking subsector.

Price Movement:
The All-Share Index dropped by 1.43% to close on Friday at 54,662.06. The market capitalization of the 208 First -Tier equities closed lower at N10.85 trillion.

Thirty - Two (32) stocks appreciated in price during the week, lower than the seventy-four (74) in the preceding week. Mobil Oil Nigeria Plc led on the gainers’ table with a gain of N20.17 to close at N217.04 per share while Chevron Oil Nigeria Plc followed with N16.51 to close at N372.00 per share. Other price gainers in the Top 10 category include:

• Guinness Nigeria Plc - N4.99

• Oando Plc - N3.99

• BOC Gases Plc - N2.91

• First Bank of Nigeria Plc - N1.91

• First City Monument Bank Plc - N1.85

• Ecobank Transnational Inc. - N1.72

• Eterna Oil & Gas Plc - N1.49

• PZ Cussons Nigeria Plc - N1.41

Eighty - One (81) stocks depreciated in price during the week, higher than the thirty-eight (38) in the preceding week. Dangote Sugar Refinery Plc led on the price losers’ table, dropping by
N4.01 to close at N29.99 per share while Presco Plc followed with a loss of N73.59 to close at N12.39 per share. Other price losers in the Top 10 category include:

• Cadbury Nigeria Plc - N2.30

• United Bank for Africa Plc. - N2.20

• Dangote Flour Mills Plc - N2.18

• Japaul Oil & Maritime Services Plc - N2.05

• Oceanic Bank International Plc - N1.78

• DN Meyer Plc - N1.68

• May & Baker Nigeria Plc - N1.58

• Prestige Assurance Co. Plc - N1.46

Four equity prices were adjusted for dividend and/or bonus as recommended by the Board of Directors. Big Treat Plc was adjusted for dividend of N0.10 per share. Prestige Assurance Plc was adjusted for dividend of N0.20 per share and bonus of 1 for 4. International Energy Insurance Plc was adjusted for dividend of N0.09 per share. Longman Nigeria Plc was adjusted for dividend of N1.00 per share.

…Supplementary Listings
A total of 429,996,932 shares were added to the shares outstanding in the name of Prestige Assurance Plc following the bonus of 1 for 4. Also, a total of 223,000,834 shares were added to the shares outstanding in the name of Access Bank Plc on Tuesday, July 8, 2008 following the conversion of part of the bank’s N13.5 billion Redeemable Bond 2010. Similarly, a total of 12,499,487,995 shares were added to the shares outstanding in the name of Fidelity Bank Plc on Tuesday, July 8, 2008 following the conclusion of hybrid offer made up of public offering of 5,501,100,421 shares, Rights offering of 498,899,579 shares and supplementary allotment of 6,498,899,579 shares.

Change of Name and Sector Reclassification
The name of Crusader Insurance (Nig) Plc was changed to Crusader (Nig) Plc following business restructuring. Also, the company was moved from the Insurance sector and listed in the “Other Financial Institutions” sector.

The N2.46 billion Special FGB Bond 2012 for Local Contractors Debt was delisted from the Daily Official List. By this action, the number of FGN Bonds and securities dropped to 41 and 316 respectively.

Technical Suspension
This was imposed on Eterna Oil & Gas Plc on Thursday, July 10, 2008 on receiving the Company’s application to undertake supplementary share offering. Also, it was imposed on First Aluminium Nigeria Plc on Friday, July 11, 2008 on receiving the Company’s application to undertake supplementary share offering.
INTERCONTINENTAL BANK PLC: Unaudited result for the first quarter ended 31st May 2008 shows Gross Earnings of N60.9 billion, as against N28.75 billion in the comparable period of 2007. Profit after tax stood at N7.82 billion compared with N4.7 billion in 2007.

C & I LEASING PLC: Audited result for the year ended 31st January 2008. The Directors had earlier recommended a final dividend of N0.06 per share. The date of closure of register of members is August 4, 2008 while payment date is August 28, 2008.

SOVEREIGN TRUST INSURANCE PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N2.5 billion as against N1.42 billion in 2006. Profit after tax stood at N357.8 million compared with N233.8 million in 2006. The Directors are recommending a dividend of N0.06 per share and bonus of 1 for 5. The date of closure of register of members is July 23, 2008 while payment date is September 7, 2008. The Annual General Meeting (AGM) of shareholders is scheduled to hold at Diamond Hall, Golden Gate Restaurant, 25B Glover Road, Ikoyi, Lagos on Tuesday, August 12, 2008.

STACO INSURANCE PLC: Audited result for the year ended 31st December 2007. The Directors earlier recommended a dividend of N0.12 per share. The date of closure of register of members is July 21, 2008 while payment date is August 4, 2008.

MAY & BAKER NIGERIA PLC: Audited result for the year ended 31st December 2007. The Directors are recommending a dividend of N0.40 per share. The date of closure of register of members is September 4, 2008 while payment date would be advised later.

ASSOCIATED BUS CO. PLC: Audited result for the year ended 31st December 2007 shows Turnover of N3.13 billion as against N2.71 billion in 2006. Profit after tax stood at N141.25 million compared with N143.01 million in 2006. The Directors are recommending a dividend of N0.08 per share. The date of closure of register of members is August 7, 2008 while payment date is September 3, 2008.

ASSOCIATED BUS CO. PLC: Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N830.3 million, as against N716.3 million in the comparable period of 2007. Profit after tax stood at N62.9 million compared with N50.2 million in 2007.

CONSOLIDATED HALLMARK INSURANCE PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N1.51 billion as against N508.4 million in 2006. Profit after tax and deferred tax stood at N230.01 million compared with N56.9 million in 2006.

RED STAR EXPRESS PLC: Audited result for the year ended 31st March 2008 shows Turnover of N3.1 billion as against N2.7 billion in 2007. Profit after tax stood at N195.7 million compared with N118.5 million in 2007. The Directors earlier recommended a dividend of N0.25 per share. The date of closure of register of members is July 24, 2008 while payment date is July 29, 2008.

EKOCORP PLC: Audited result for the year ended 31st December 2007 shows Turnover of N532.75 million as against N457.7 million in 2006. Profit after tax stood at N72.2 million compared with N65.61 million in 2006. The Directors are recommending a dividend of N0.15 per share. The date of closure of register of members is August 25, 2008 while payment date is September 8, 2008.
STOKVIS NIGERIA PLC: Audited result for the year ended 31st December 2007 shows Turnover of N2.31 million as against N1.22 million in 2006. Loss before tax stood at N0.714 million compared with N4.3 million in 2006.

NAMPAK NIGERIA PLC: Audited result for the year ended 30th September 2007. The date of closure of register of members is July 21, 2008

CHEVRON OIL NIGERIA PLC: Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N8.6 billion, as against N18.34 billion in the comparable period of 2007. Loss after tax stood at N190.63 million compared with profit after tax of N531.24 million in 2007. The company’s result was affected by the strike action embarked upon by the Transport union that lasted for about two months. The company is back into full operations and efforts are being made to recover lost volume.

A turnover of 206.9 million units worth N210.65 billion in 1505 deals was recorded this week, in contrast to a total of 280.3 million units valued at N281.2 billion exchanged in 2120 deals during the week ended July 3, 2008. The most active bond (measured by turnover volume) was the 3rd FGN Bond 2009 Series 11 with a traded volume of 38.7 million units valued at N42.73 billion in 387 deals.

Source: Nigerian Stock Exchange

A Timely Intervention

The Securities and Exchange Commission and Nigeria Stock Exchange take swift actions to halt continued downward slide in the value of stocks in the market

June was a frantic month for the regulators of the Nigerian stock market. During the month the Securities and Exchange Commission, SEC, and the Nigeria Stock Exchange, NSE, struggled to halt the slide that was speedily eroding the market’s capitalisation. The stock market lost N1.215 trillion when the market’s capitalisation crumbled from N11.631 trillion to N10.416 trillion between June 2 and June 25. The slide was precipitated by an unconfirmed report that the Central Bank of Nigeria, CBN, had banned banks from engaging in margin trading. The apex bank later denied issuing such a directive.

The first step taken by SEC and NSE was to empanel a committee that would review the practice of margin trading, known also as financier account in the capital market. A financier account enables investors and stockbrokers to borrow money from financial institutions for the sole purpose of buying shares in the stock market at a predetermined interest rate.

Members of the committee were selected from SEC, CBN, NSE and the Nigerian Deposit Insurance Corporation, NDIC. On June 9, the NSE followed this up with the introduction of the circuit breaker, an artificial support system that does not allow stocks to trade below their previous day’s closing price.

The NSE also directed that a stock must trade up to 100,000 units before its price could either move up or down. It also went further to lift the ban it placed on the financier account, on June 11, and renamed it as custody account. Sola Oni, NSE’s spokesperson, said, “that the lifting of the suspension was with immediate effect. Under this system, the purchased stock acts as collateral and cannot be sold without the knowledge of the lending institution. This arrangement empowers the investors and sustain demand in the market.

Ndi Okereke-Onyiuke, NSE’s director-general, explained that it was expedient for the market regulators to intervene and restore confidence to the market. Said she: “There is no stock market in the world where the managers will sit down and watch the market crash. If we see something going wrong in the market, we must intervene.”

In a bid to sustain investors’ confidence, SEC announced its plan to further cut down the cost of doing business in the capital market. Earlier in April, the apex capital market regulator succeeded in bringing down transaction cost in the market by 40 percent. Lanre Oloyi, corporate affairs manager of SEC, explained that the move was intended to attract foreign and local investors into the market. “Already, there is an in-house committee working on this and as soon as it concludes its business, the outcome would be made available to the federal government for approval before its implementation,” he said.

The above measures appeared to have restored investors’ confidence as the market capitalisation soared from N10.950 trillion on June 6 to N11.721 trillion on June 13. But the revival was only momentary as the market plunged into another wave of decline with share prices dropping on daily basis between June 16, and June 25, from N 11.416 trillion to N10.416 trillion.

As the share prices crumbled, the question of concerned observers was why the market’s downward curve was so steep in June. Onyenwechukwu P. Ezeagu, chief executive of Solid-Rock Securities and Investment Limited, Lagos, told Newswatch that there are three major determinants of share price movement in the stock market. They are a company’s performance, the interplay of the forces of demand and supply as well as market’s hearsay. All these factors, he explained, contributed to last month’s bearish mode of the market.

“The market was reacting to the pronouncements of market’s regulators, particularly the rumour on margin trading, which stampeded stock brokers into selling off stocks in order to meet obligations to their bankers,” he said.

The stampede, he explained, disrupted the market equilibrium as supply rose above demand to precipitate the fall in share prices. Ezeagu also attributed the drop in prices of shares at the market to government’s delay in releasing the capital budget and the distraction caused by SEC’s directive that stock brokers should increase their capitalisation from N75 million to N1 billion or loose their operational license.

David Obi, a member of the governing council of the Manufacturers’ Association of Nigeria, MAN, told Newswatch that the downward trading in the Nigerian capital market mirrors the economic recession afflicting the global market. He said that even as low as the Nigerian market may appear at the moment, it was still performing better than most other countries’ capital markets.

“The slow down in the stock market was even good for us, so that we can ponder on the way we invest. Also, an ever-rising market is not always possible. It is normal for the market to pulsate sometimes,” Obi said. He, however, noted that the important thing is for the country to be serious in the manner it manages its economic activities because in the final analysis “it is the investors’ confidence in the economy that drives the capital market.”

Bismarck Rewane, head of Financial Derivatives, has warned regulators to be more careful with their pronouncements because of the sensitive nature of the market. He said that their actions were capable of increasing the anxieties of investors, “and when investors are anxious, they do only one thing: stop bringing money in and might start to take money out.”

Rewene was right. The withdrawal of the directive for brokers to increase their capital base on June 26, coupled with the lifting of the ban on financer account, has seen the market bouncing back and becoming more bullish. Consequently, the market capitalisation has grew from N10.416 trillon on June 25 to N10.920 trillion on June 30.

Nigerian companies set to woo UK investors

Some 20 Nigerian companies cutting across all sectors of the economy will be in London from 8-9 July to woo international investors as a way of attracting international funding to support their businesses, according to the Nigerian Stock Exchange (NSE) and Renaissance Capital, an international investment bank which is packaging the business trip.

The interactive session, which will provide first time opportunity to non-financial services sector companies from oil, gas, manufacturing, fast moving consumer goods, telecommunication and real estate, will hold at Mandarin Oriental Hotel, London.

“The recent boom in the Nigeria financial services sector has led to increased capacity to support the development of other sectors,” said the Chief Executive Officer of Renaissance Nigeria, Andrew Cornthwaite.

He said many of the companies were seeking ways of attracting the necessary funding to expand their businesses, hence the need to reach out to foreign investors.

“We are delighted to be able to offer them (companies) the first opportunity to meet with prospective international investors,” he added.

Nigerian Stock Exchange can’t collapse — Swiss-based Nigerian economist

FEW days ago, a Nigerian owned Swiss-based firm, AME &T Group, organised a four-day seminar on Private Wealth Management (PWM) for top executives of banks and other professionals in the country. The resource persons were experts drawn from leading management institutes in Switzerland.
In exclusive interviews with Financial Vanguard, the President of AME & T (the Nigerian that organised the seminar) and three of the resource persons spoke on the seminar and various other economic issues. Could you give us a brief resume of AME & T Group that just organised the seminar on private wealth management in Nigeria?

It is basically an enterprise development management, an investment advisory firm. We do a lot of risk management in wealth management as well as sustainable enterprise development practice.

We have done a lot of jobs managing clients, both institutional and private, as well as government, especially governments from Africa in area of maximizing their wealth with Europe, especially Switzerland, whereby they could tap into Switzerland’s private banking practice as well as investment banking practice viz a viz the growing trend in African countries to tap into strong countries in terms of project management like currently, the Federal Government of Nigeria is trying to raise bonds.

They are doing that by approaching international financial institutions, not only on the investment banking, but also on private banking. There is need for that exchange of knowledge and expertise. We have advised a lot of multinationals as well. So, basically, that is our core practice.

AME &T Group is structured into three key products and services. One is Enterprise Development and Management. We have advisory services and then the training arm. These three components actually dictate the way we operate and our core practice. Then there are some services under our advisory.

For instance, we have Investment Advisory section that deals with energy industry. We advise quite a lot of multinationals on raising finance may be from private equity clients of our investment outlet. It could be loan or whatever has to do with their investment banking-related issue. That is in the oil and gas sector. We also handle telecom investment advisory.

Basically, what we do is work with institutions that are willing to maximise profitability. We also provide some finances in terms of arranging loans as well as helping them to structure their finances in a way whereby they could tap into foreign funds. Thirdly, on the training aspect, which is part of the advisory also, is where we bring our expertise to bear in an environment like Nigeria that is evolving. So, that is the way we are structured as a Swiss firm.

We are a decade old. We are more than that in actual sense, in that AME & T Group came as a result of an acquisition of a Swiss company which is about 50 years old. We re-structured it and repositioned it to meet the needs of our immediate clients in the investment banking-related field. Our passion for wealth management came as a result of our expertise in that field. We try to impart that expertise and knowledge to our clients and various institutions - be it a non-governmental organisation (NGO) or individuals - depending on what they want. So, that is the way we are structured.

The training we conducted in Nigeria was the first of its kind. We had a similar event in Geneva, private banking training, which we did in 2004. We had some institutions that attended that. But this was a bit tailor-made for the Nigerian audience.

That of Geneva was more of an international event. We had coordinated and organised series of teachings and lectures for top executives from Africa. An example was the one we had with the Swiss Stock Exchange in Zurich about three years ago.

So, we are well known in the Swiss environment to provide qualitative training as well as in-house training for clients especially those from emerging or transiting economies like Nigeria. So, one of the reasons we decided to do it here in Nigeria is because of the post-consolidation of the banks knowing full well that a lot of banks are diversifying into private banking. A lot of them need the expertise.

We managed to have one-on-one discussions with some of the top chief executive officers (CEOs) of these banks. From our researches and findings, we realised that a whole lot of them do not have solid background on private banking practice.

It was as a result of this research that we decided that we should provide this training capacity to these top level executives from these institutions. This, to us, is a welcome development and from the response that we have received so far, we believe that there is definitely going to be a lot of follow up on this subject.

Agreed that Nigeria is a transiting or emerging economy, there was a recent prediction by the United States intelligence agency that the Nigerian economy would collapse in 20 years time. What do you think about that report?

Well, that is more of a political statement than economic statement. Political because it basically came from the CIA’s intelligence report on Nigeria. Economic indices state that definitely, Nigeria has a growing pattern and that pattern will continue to grow as long as the nation remains the same. That is, if it does not disintegrate, we will continue to have the economy. From the economic point of view, there is no basis for that. They have to match that prediction up or such analysis and forecast with current trend in the economy.

There is another prediction and anxiety that the Nigerian Stock Exchange will soon collapse. Did you hear about that and what do you think about it?

Yes, we heard that and we are following it. But I have to tell you that the Nigerian Stock Exchange will not collapse. It will correct itself. The collapse of an exchange in a way is impossible especially in a regulated economy and also in a liberal economy, in that you have an all-share-index. Basically, you do not expect a nation’s stock exchange to collapse.

It means all the companies will collapse. That is what they are saying in essence, which is impossible. Right, there will be bubble and there will be effect of such bubble. But that does not mean that a nation’s stock market will collapse as a result of that bubble. There will be some fundamental adjustments and changes.

You do not expect that the market has to be perfect all the time. I tell you, there is no perfect market or perfect economy. Even the New York Stock Exchange, London Stock Exchange, definitely they experienced this kind of bubble. There is always this kind of upward and downward trend in any market economy. It is correcting itself because, the Nigerian economy was only just of recent opened up and also, it is just of recent that you are witnessing that kind of inflow of funds from investors.

Definitely, that would affect your trading pattern. It will affect the market itself. The stock market in every way, is regulated. For instance, three years ago, we were here and met with stock exchange leadership led by the Deputy Director-General, we realised some of these abnormal trends.

Even the trading volume at that period was extremely low and what we were even clamouring for was a higher trading volume to attract foreign investors and make the exchange more liquid. Now with post-consolidation of the banks, you have seen that a lot of those banks have brought in a lot of liquid cash into the stock which has made the stock exchange a little more vibrant, more dynamic and more attractive. That is why you see a lot of people coming in.

That is what is affecting the market now. There is too much influx of funds and this is giving it that level of vibrancy that was not the pattern years back. It is shaky.

That is why we call it bubble. Right now, there is a redefinition of the whole market. Someone like me who never believed in the market, now I have a lot of funds invested in various Nigerian stocks. The consolidation of banks, other financial institutions, that itself has created a lot of transformation in both the financial services sector as well as the stock market.

You as a Nigerian, you have a company in Switzerland. Nigerian government is clamouring for Nigerians in the diaspora to come home and invest in the economy. When are you going to do that?

We are doing our best to come back. Like I met with President Yar’Adua, during his visit to Davos. We made a presentation, our firm was among what they called Zurich 9. I had my foreign associates with me. We really talked with the president about a whole lot of investments in Nigeria rather than chasing contracts. Our approach is really to try to drive volume of funds and investments to Nigeria. So, we set up, that is our other practice, a First African fund which we are going to launch very soon and this was part of the presentation that we made to Mr. President.

The fund will invest in both listed equities as well as conduct private equity bills. We are looking at bringing quite a lot of investments into the Nigerian investment arena. That is my own part of driving volume and helping the economy to grow. But to come physically, I think Nigeria still needs me there to help bring the money. When I am here, you will not have that access anymore.
What is discouraging you from coming back to Nigeria?

Nothing whatsoever except that it is just an issue of mindset and what I consider to be my comfort zone. I am comfortable there. At the moment, I do not have any comfort zone here.

If for example, there is stable electricity, will you come?
You are bringing a whole lot of political issues that I would not want to talk about. Well, that is part of infrastructural development.

That is actually an aspect we will be willing to participate in and we will like to advise the government. I will say to you as an African firm based in Switzerland, for 40 years the Nigerian government never owned a property in Switzerland. We advised the government and a new Chancery in Switzerland was acquired through us for the government of Nigeria. The Swiss Government is indeed very grateful about this.

So, we have been advising the government. This is one of the things we have been doing to improve the nation’s image there. So, the first Chancery of the Nigerian Government, owned by the Federal Government, was bought last year, moved in last year by the Nigerian Government. They now own a property and they are no longer in a rented property.

They had been in Switzerland for 40 years without owning a property and wasted money for 40 years in Geneva which sits almost 70 per cent of all United Nations agencies. It was a disgrace at a point. So, we had to come in to bail out. So, it is one of our success stories.—Vanguard

NSE approves 25% absorption of Costain WA 2007 offer oversub

The Nigerian Stock Exchange (NSE) has approved the absorption of the 25 percent allowed by regulatory authorities on oversubscription of Public Offers (POs) by Construction Giants Costain West Africa Plc (COSTAIN).

Phil Wharton, Managing Director/Chief Executive Officer (MD/CEO) of the company affirmed this in Lagos Nigeria at the NSE; while addressing members of the Capital Market Correspondence Association of Nigeria (CAMCAN).

“We have just received the final words from the NSE towards taking over the 25 percent maximum allowed in the event of oversubscription in Public Offer” Wharton said.

He confirmed that Costain’s 2007 hybrid offer by way of subscription and Rights Issue were 240 percent and 140 percent oversubscribed respectively.

Wharton further confirmed that the shares were listed on the Floors of the NSE a few weeks back.

On the issue of share certificates, he affirmed that Costain has dispatched same to investors; taking into consideration the complaints as regards the issue.

“We are very concerned on the bad publicity as regards the issue of dispatch of share certificates to investors. Therefore our advisers had informed us that all share certificates had gone to shareholders, anyone who is yet to receive should get back to us” Wharton said.

Also on the issue of return money, He confirmed that this has been returned to investors with interest.

Though as at the time of filling in this report, he could not confirm the exact amount in figures returned to investors. “I do not really have the information now, but in due time we would furnish you with same” Wharton affirmed.

He further confirmed that Costain West Africa delivered a return of over 250 percent in a six month period with its 2007 Public Offer (PO).

“Costain have delivered a return of over 250 percent in a six month period with our offer at N13.00 in December and a share price of almost N30.00 today” Wharton said.

As earlier reported, Costain West Africa, late 2007 by way of subscription and Rights offered to the Nigerian investing public 178,162,966 and 519,740,000 Ordinary Shares of 50 Kobo each at N13.00 and N11.00 per share respectively

CBN denies halting margin lending

The Central Bank of Nigeria on Friday publicly declared that it neither issued nor contemplated to stop commercial banks from their practice of margin lending or lending for investment in securities

The CBN Governor, Prof. Chukwuma Soludo, stated this at a Breakfast Forum for the Bankers’ Committee and financial system regulators in Lagos. On the price volatility witnessed on the Nigerian Stock Exchange in recent weeks, Soludo said market volatility was a major feature and common phenomenon in the global market system. He said this was not peculiar to the NSE alone.

He said, “We are still surprised ourselves to hear the rumours making the rounds that we stopped margin lending by banks. There was no letter issued or discussion in this regard. It was not even contemplated by the CBN. We did not know where it came from, but certainly not from us. We make bold to categorically state that there was no basis for it. The CBN will not and does not prescribe to the banks on which sector they should lend to and which sector they should not. The banks are free to lend at whatever direction their management wishes them to.”

Also speaking at the session, the Minister of State for Finance, Mr. Remi Babalola, expressed faith and optimism in the economy, saying the position of the capital market at the moment was one that should attract more foreign direct investment. He said, “We expect that contrary to speculations, this is the right time for investment both domestically and internationally. Foreign direct investments should quadruple yearly and this is what we expect. The market is still in the right direction.”

On the controversies surrounding the operation of custody accounts and margin accounts by stockbrokers, the Director-General, Nigerian Stock Exchange, Prof. Ndidi Okereke-Onyiuke, said the NSE did not stop custody account operations as perceived by market watchers. She said the Central Securities and Clearing System simply issued a letter to the authorities to the effect that the margin accounts be maintained, adding that the controversy was because people were more used to the facility. She said the nomenclature was simply changed from custody accounts to margin accounts.

FCMB launches Alpha fund for investors

AS part of measures to assist investors minimise the volatility of their investments and manage their risks, First City Monument Bank Plc (FCMB) in partnership with International Consortium, has introduced a $100 million multi strategy hedge fund, called legacy African Alpha fund into Nigerian financial markets.

The hedge fund, which is the first of its kind involving a Nigerian institution is being introduced at a period when investors in the Nigerian Capital Market are experiencing volatility in their investments.

Addressing journalists in Lagos, yesterday, the Executive Director, Investment Banking, FCMB Group, Mr. Gboyega Balogun said that the legacy Africa Alpha Fund is a $100 million multi strategy hedge fund focusing primarily on Africa’s high growth opportunities with limited exposure to the middle East and Asia.

According to him, the hedge fund seeks opportunities to reduce risk through hedging strategies by shorting a stock or asset class with a target return of 22 per cent per year in dollar terms on any equity with less than 10 per cent risk or volatility.

The fund, which will be invested exclusively in Africa and Middle East debt and equity will be structured as an absolute return fund. Specifically, a minimum of 70 per cent of the fund will be invested in Africa while a maximum of 30 per cent will be invested in the middle East.

He also noted that International Consortium, which currently manages investments worth over two billion dollars for bluechip financial institutions such as American Express will be providing the funds, which FCMB will sense as advisers in successfully deploying the strategies.

On the strategies involved, Mr. Balogun said that the organisation will observe a top down macro strategy in channelling investments in the country till it reaches the fundamentals.

He said: “We will begin by looking at macro economic story in each country within its universe to decide allocation to these countries after which we look at sectors benefiting or from macro story in favoured countries before filtering down to fundamental analysis on chosen asset class.”

He also added that the fund is only available for institutional and professional investors with limit of $100,000 minimum investment in equities, fixed income and currency.

On its future outlook, Balogun said that the organisation is building a legacy family of funds with long-term security by introducing four more products into the market so as to increase its assets to $500 million in the next 12 months and one billion dollars in the next 18 months respectively.

“Currently, we have two funds launched; Legacy Nigeria Equity Fund managed by CSL and Legacy African Alpha Fund managed by INTIL consortium. We have four more to come in the next 12 months. The franchising model allows us to grow very fast while retaining high quality, top performing managers and consistent governance. We expect to get to over N120 billion assets under management within 24 months, making us; possibly the largest asset manager in the region,” he added.

On its human capital development drive, he said that FCMB and International Consortium are engaging in exchange programmes to ensure that the fund is managed independently by FCMB.—Guardian

Equity Assurance plc records 722 percent profit.

Equity Assurance plc has recorded a profit after tax of N445 million in its 2007 financial year. These was made known by the chairman of the company, Mr Olufemi Somolu during the company’s 21st annual general meeting held in Lagos on Monday. The profit after tax rose compared to the N54.1 million it recorded in 2006 shows an increase of 722 percent. Profit before tax for the company was also impressive as it stood at N498.7 million compared to N55.8 million in the 2006 financial year, indicating an appreciation of 793 percent.
Turnover during the period under review grew by 572 percent from N225.6 million in 2006 to N1.5 billion in 2007. While attributing the impressive outcome of the result to the merger that occurred in the company during the last consolidation exercise in the insurance company, he announced that the company was going to give a dividend payout of 35 kobo per share.

Nigerian Stock Exchange for July 1st, 2008.

The Nigerian Stock Exchange continued on its recovery path today as the Market price indicator, the All Share Index again edged up again to 55,949.00 base points as against yesterday’s 54,905.36 base points. The total market shares valuator, the Market Capitalisation also went up to N10,920,315,601,242.56 as against yesterday’s N10,716,615,132,199.71.

There was a total of 10,459 deals involving a volume of 573,179,540 unit shares valued at N9,381,974,978.27; as against yesterday’s 13,658 deals involving the trading of 1,236,774,565 unit shares volume, valued at N12,739,794,993.53.
The stocks with the most traded unit shares in a descending order includes: (1) PLATINUM which traded with a volume of 95,846,363 unit shares, valued at N2,828,708,971.90; (2) FIDELITYBK traded with 58,123,359 unit shares valued at N589,790,903.50; (3) IANSURE traded with a volume of 50,285,588 unit shares worth N52,297,011.52; (4) FIRSTBANK traded with a volume of 26,988,405 unit shares worth N1,154,294,081.85; (5) NIGERINS traded with a volume of 20,092,026 unit shares valued at N136,640,966.80.
The top price gainers of the day includes: (1) MOBIL which gained N9.84 to close at N206.71; (2) JBERGER gained N5.73 to close at N120.33; (3) ACCESSRDB3 gained N4.00 to close at N104.00; (4) WAPCO gained N2.55 to close at N54.15
While the top losers of the day includes: (1) CHEVRON lost N16.92 to close at N321.67; (2) TOTAL lost N12.00 to close at N238.00; (3) OANDO lost N8.74 to close at N195.25; (4) 7UP lost N2.46 to close at N52.00

Law Union drives NSE volume

Law Union and Rock Insurance Plc drove the market volume on the floor of the Nigerian Stock Exchange last Friday by recording a transaction volume of 252.815 million shares valued at N1.206 billion in only 23 transactions inching by 3 kobo to close at N4.93 per share.

Aso Savings and Loans Plc emerged the second volume driver having pulled a transaction volume of 154.034 million shares worth N574.918 million executed in 89 deals dropping 19 kobo to close lower at N3.61 per share.

Investment and Allied Assurance Plc occupied the third position with 126.388 million shares exchanged by investors in 432 deals at N137.763 million easing 5 kobo to close at N1.09 per share.

Goldlink Insurance Plc followed from a distance with 78.407 million shares equivalent to N164.006 million exchanging hands in 81 trades while Platimum Habib Bank Plc trailed with 67.691 million shares valued at N1.895 billion in 698 deals adding 5 kobo to close at N28.50 per share.

Other volume drivers in the market last Friday include Fidelity Bank Plc 46.161 million shares, Sterling Bank Plc 37.767 million shares, First Inland Bank Plc 35.013 million shares, Intercontinental Bank Plc 32.951 million shares and United Bank for Africa Plc 29.610 million shares.

In all, investors staked N12.740 billion on 1.237 billion shares in 13,658 deals as against 983.537 million shares worth N17.294 billion in 17,112 trades recorded the previous day.

Analysis of the two days’ record showed that though the transaction rose when compared to the previous day’s, the market value, and number of deals which measures investors’ interest in shares dropped, an indication that investors are still treading cautiously.—The Tide
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