Economy
NGX Group Targets Private Equity Investments, Mergers, Acquisitions
By Dipo Olowookere
In order to make shareholders enjoy the benefits of demutualisation and maximize returns, the Nigerian Exchange (NGX) Group Plc is currently undertaking some financial planning activities.
These steps are being engineered by the Group CEO of the organisation, Mr Oscar Onyema, and they include the possibility of mergers and acquisitions, private equity investments, treasury management, capital allocation and fundraising.
According to Mr Onyema, the company is well-positioned to achieve these goals, going by its financial performance in 2020, expressing optimism that these strategies would make the organisation’s shares attract investors when they are eventually listed on the NGX Limited.
“As the group progresses its plans to list on Nigerian Exchange Limited, there are exciting days ahead. The financial performance of the Group in 2020 showed strong resilience and prospects for growth.
“The group ended 2020 in a sound financial position with net asset growth of over 10 per cent to N31.28 billion and income and resulting surplus after tax valued at N6.02 billion and N1.84 billion respectively.
“In the context of COVID-19 pandemic, we maintained tight cost controls, which reduced expenses by 13 per cent despite investments in technology that allowed remote operations with zero downtime,” he had said.
On Thursday, September 9, 2021, the NGX Group held its Annual General Meeting (AGM) in Abuja. It was the first yearly shareholders’ gathering after the demutualisation of the Nigerian Stock Exchange (NSE).
At the meeting, shareholders approved all the resolutions proposed by the board, including the re-election of the non-executive directors who were retiring by rotation; the election of the members of the audit committee; the proposed remuneration for the board and non-executive members of the erstwhile national council of the NSE; and the introduction of equity-based incentives to employees’ remuneration, including an Employee Share Ownership Plan (ESOP) and a Performance-Based Long-Term Incentive Plan.
NGX Group, leading by example as a new corporate entity, is committed to the highest governance standards, recognising its role in critical capital markets infrastructure.
Much like leading exchanges in the world today (London Stock Exchange Group, Intercontinental Exchange, Singapore Exchange, Japan Exchange Group) and other African exchanges such as Johannesburg Stock Exchange and FMDQ, the demutualised NSE gave rise to a group structure with attendant benefits.
Today, NGX Group stands as the non-operating holding company with three (3) subsidiaries – the operating Exchange, Nigerian Exchange Limited led by Mr Temi Popoola, as the Chief Executive Officer (CEO); the independent regulatory company, NGX Regulation Limited led by Ms Tinuade Awe as the CEO; and the real estate company, NGX Real Estate with Mr Gabriel Igbeka serving as Acting CEO. Each of these entities is governed by independent boards, the composition of which was not only strategic but in line with acceptable practices.
At an Extra-Ordinary General Meeting (EGM) of the then members of NSE in March 2020, a resolution was passed pertaining to the appointment of the inaugural board of NGX Group, post demutualisation.
The process relating to the selection of council (board) members was duly followed and the identified candidates were taken through a rigorous due diligence exercise before passing through the internal governance process, being submitted to the Securities and Exchange Commission for approval and thereafter, presented to previous members at the 2020 EGM.
The members agreed to the importance of maintaining continuity and preserving The Exchange’s collective knowledge and learned experience (institutional memory) as well as retaining stakeholder confidence and maintaining market stability.
It was, therefore, agreed that the composition of the Boards would comprise individuals selected from the erstwhile National Council and external candidates. This understanding was contained in the Scheme of Arrangement dated 20 January 2020 between the NSE and the dealing and ordinary members of the NSE in respect of the demutualisation of the exchange (the Scheme).
The scheme was approved at the Court Ordered meeting held on 3 March 2020. The approved Scheme of Arrangement was sanctioned by the court on May 14, 2020, and filed at the Corporate Affairs Commission (CAC) on June 1, 2020, and it became effective on the date it was filed at the CAC.
NGX Group’s board currently has 11 members and out of the 11 directors, five have direct or indirect shareholdings in the company providing strong representation for the company’s shareholders.
In addition, going above the statutorily required minimum that a public company shall have at least three independent directors (S.275 (1) CAMA 2020), NGX Group went with four independent directors.
Transition agreements expected to last for 18 months were also agreed and it was recognized that subsequent composition of the Board following this transition period will evolve in line with existing rules and regulations, market standards, competitive realities and succession planning policies.
The composition of the inaugural board – comprising some members of the erstwhile council and new members – was approved at the EGM, on the condition that their appointment would become effective post demutualisation.
The market continues to repose confidence in NGX Group evidenced by the statement from the Chairman, Association of Securities Dealing Houses of Nigeria, representing the largest shareholder group in the company, Mr Onyewenchukwu Ezeagu, who stated prior to the recent 60th AGM, “As major shareholders, we were involved in all the processes of demutualisation.
“We are comfortable with the agenda of the meeting as we have been part of the whole process. The proposed resolutions had been made public in the course of the demutualisation. The meeting will bring about a renewed relationship between the NGX Group and its stakeholders.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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