Economy
83.7% Dividend Payout Ratio Excites Shareholders of CSCS
By Aduragbemi Omiyale
Shareholders of the Central Securities Clearing System (CSCS) Plc have expressed pleasure over the decision of the board of the company to pay a cash reward to them for the 2021 financial year.
On Friday, May 6, 2022, at the Civic Centre, Victoria Island, Lagos, shareholders of CSCS gathered for the Annual General Meeting (AGM) and the board presented the payment of a dividend of N3.7 billion to them for approval.
The amount translates to an 83.7 per cent payout ratio, reflecting the resilient profitability of the organisation despite the impact of lower trading activity on most exchanges in the Nigerian capital market and inflationary pressures.
The investors were happy with the payment, commending the board and the management of CSCS for an incredible performance in the midst of the challenging operating environment.
Chairman of CSCS, Mr Oscar Onyema, while addressing the shareholders at the meeting, stated that, “Notwithstanding the volatile operating environment and moderated capital flows, as reflected in the subdued capital market activities, the earnings fundamentals of your company remained resilient and indeed stronger than ever.
“This fact is evident in the impressive revenue growth of 39.2 per cent, driven by stellar growth in ancillary income. The equity market recorded one of the weakest secondary market activities in the past few years, with the average daily trade value of N3.9 billion, some 10 per cent below the trading activity recorded in the 2020 financial year, explaining the tepid transaction fees.
“Albeit income from ancillary services recorded a significant boost, contributing N2.2 billion or 21.5 per cent of total income in 2021 FY, from N526 million or 11.3 per cent of total income in 2020FY.
“This performance reinforces the capacity of the management in delivering on the board’s vision result of diversifying the business and enhancing the value accretion prospect to shareholders in a sustainable manner.
“More importantly, my colleagues and I on the board of your company are excited at the prospect of new offerings arising from strategic partnerships and new initiatives.
“In our oversight role, we are working with the management to invest relevant resources towards exploring new frontiers for growth, especially as these initiatives are expected to foster retail investor penetration and broader capital market growth.”
While commenting on the outlook for the business, the Chairman noted: “typical of a pre-election year, 2022 comes with its unique macro challenges but I am optimistic on the earnings capacity and overall resilience of our business as we hope to consolidate on the strong foundations and extract synergies opportunities with our participants and partners in sustaining the positive trajectory of the business.
“Hence, with the support of shareholders and other stakeholders, CSCS would continue to deliver superior performance and create wealth for shareholders.”
In the same vein, the chief executive of the firm, Mr Haruna Jalo-Waziri, said; “Reflecting the ingenuity of our participants and more importantly quick adoption of new remote access technologies, the Nigerian capital market remained active through the prolonged COVID-19 crisis. The collaboration of our regulator and participants has been incredible in sustaining our operational protocols and IOSCO PFMI standards.
“Though clearing and settlement activity waned by 10.2 per cent due to lower participation of foreign investors in the Nigerian equity market and a host of macro challenges, we are excited at the growth in our depository assets by 6.1 per cent to N23.0 trillion, reflecting new listings of securities across our multiple exchange partners as well as issuers’ and investors’ confidence in the safety and secured accessibility of our systems.
Continuing, Mr Jalo-Waziri said: “Despite the average inflation rate of 17.0 per cent during the year, we sustained our cost efficiency strategy, leading to a 1.6 per cent decline in operating expenses.
“Overall, we achieved N5.8 billion and N4.4 billion profit before tax and profit after tax respectively, underpinning the resilience of the business and commitment of my colleagues and me in delivering on our pledge to sustainably create value for shareholders and our broader ecosystem.
“It has been 25 years of meritorious service, as the infrastructure for the Nigerian capital market. We have pioneered a number of initiatives and efficiencies in the market and have enjoyed the best collaborative engagements with different stakeholders.
“Whilst we relish our progress working with other stakeholders in transforming the Nigerian capital market, we reckon there is a long way to go in bridging the gap towards our aspiration of positioning the Nigerian capital market as the hub of securities services in Africa and one of the leading capital markets, globally.
“To this end, we have reinvigorated our strategic thrust with the development of a medium-term playbook that would enhance our capabilities in executing new initiatives towards deepening the Nigerian capital market and strengthening our business growth frontiers for the mutual prosperity of all our stakeholders.”
In the year under consideration, the organisation achieved its diversification drive with the ultimate objective of creating sustainable and superior wealth for shareholders and its broader stakeholders.
By Adedapo Adesanya
The United Arab Emirates has announced its decision to quit the Organisation of the Petroleum Exporting Countries (OPEC) to focus on national interests.
This dealt a heavy blow to the oil-exporting group at a time when the US-Israel war on Iran had caused a historic energy shock and rattled the global economy.
The move, which will take effect on May 1, 2026, reflects “the UAE’s long-term strategic and economic vision and evolving energy profile”, a statement carried by state media said on Tuesday.
“During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all,” it added. “However, the time has come to focus our efforts on what our national interest dictates.”
The loss of the UAE, a longstanding OPEC member, could create disarray and weaken the oil cartel, which has usually sought to show a united front despite internal disagreements over a range of issues from geopolitics to production quotas.
UAE Energy Minister Suhail Mohamed al-Mazrouei said the decision was taken after a careful look at the regional power’s energy strategies.
“This is a policy decision. It has been done after a careful look at current and future policies related to the level of production,” the minister said.
OPEC’s Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a narrow chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas supplies normally pass, because of threats and attacks against vessels during the war.
The UAE had been a member of OPEC first through its emirate of Abu Dhabi in 1967 and later when it became its own country in 1971.
The oil cartel, based in Vienna, has seen some of its market power wane as the US has increased its production of crude oil in recent years.
Additionally, the UAE and Saudi Arabia have increasingly competed over economic issues and regional politics, particularly in the Red Sea area.
The two countries had joined a coalition to fight against Yemen’s Iran-backed Houthis in 2015. However, that coalition broke down into recriminations in late December when Saudi Arabia bombed what it described as a weapons shipment bound for Yemeni separatists backed by the UAE.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested four price decliners on the NASD Over-the-Counter (OTC) Securities Exchange on Monday, April 27. The alternative stock market opened the week bullish during the session with a 0.03 per cent uptick.
According to data, the security depository company added N2.61 to its share price to close at N76.26 per unit compared with the preceding session’s N78.87 per unit.
As a result, the market capitalisation of the platform increased by N820 million to N2.425 trillion from N2.424 trillion, and the NASD Unlisted Security Index (NSI) gained 1.38 points to finish at 4,053.97 points compared with the 4,052.58 points it ended last Friday.
The four price losers were led by NASD Plc, which slumped by N3.80 to sell at N34.70 per share versus N38.50 per share. FrieslandCampina Wamco Nigeria Plc fell by N1.45 to N98.10 per unit from N99.55 per unit, Food Concepts Plc slid by 27 Kobo to N2.43 per share from N2.70 per share, and Geo-Fluids Plc dipped by 9 Kobo to N2.91 per unit from N3.00 per unit.
The value of securities transacted by market participants went down by 82.0 per cent to N7.4 million from N41.3 million units, the volume of securities declined by 28.5 per cent to 319,831 units from 447,403 units, and the number of deals dropped by 34.1 per cent to 29 deals from 44 deals.
Great Nigeria Insurance (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 59.6 million units sold for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Also, GNI Plc was the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Resourcery Plc with 1.1 billion units traded for N415.7 million, and Infrastructure Guarantee Credit Plc with a turnover of 400 million units worth N1.2 billion.
By Adedapo Adesanya
The first trading day of the week in the currency market was bearish for the Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 27.
Yesterday, it lost N5.80 or 0.43 per cent against the United States Dollar to trade at N1,364.24/$1, in contrast to the N1,358.44/$1 it was traded last Friday.
In the same vein, the Nigerian currency depreciated against the Pound Sterling in the official market by N13.70 to close at N1,847.72/£1 versus the preceding session’s N1,834.02/£1, and slumped against the Euro by N11.56 to sell at N1,602.29/€1 versus N1,590.73/€1.
Also, the Nigerian Naira tumbled against the greenback during the trading day by N5 to quote at N1,385/$1 compared with the previous rate of N1,380/$1, and at the GTBank FX desk, it traded flat at N1,370/$1.
The poor performance of the domestic currency could be attributed to liquidity shortage at the official currency market on Monday, which came amid surging demand for international payments. At $76.50 million, interbank liquidity printed higher across 79 deals, up from the $43.572 million reported on Friday.
Nigeria’s gross external reserves declined to $48.45 billion amid a month-long decline in inflows, amid uncertainties in the global commodity market. The depletion of foreign reserves could be partly attributed to the Central Bank of Nigeria’s intervention in the FX market.
The market remains perturbed by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market, while boosters, including oil prices, continue to look rocky due to stalled discussions and unclear ceasefire negotiations between the US and Iran.
A look at the cryptocurrency market, Bitcoin (BTC) has been rejected near $79,000 three times in eight sessions, leaving the level as the de facto ceiling of its current trading range even as major cryptocurrencies trade lower over the past day. It lost 0.9 per cent to sell at $77,003.61.
Analysts say that upcoming US Federal Reserve policy decisions and top tech firms’ earnings this week could provide the catalyst to push bitcoin decisively above $80,000.
The market also continued to weigh Iran’s interim deal proposal to reopen the Strait of Hormuz, which failed to advance over the weekend. The White House said US officials were discussing the latest Iranian proposal but maintained “red lines” on any deal to end the eight-week war.
Solana (SOL) dropped 1.8 per cent to $84.25, Ripple (XRP) went down by 1.6 per cent to $1.39, Ethereum (ETH) depreciated by 1.3 per cent to $2,290.00, Binance Coin (BNB) declined by 0.5 per cent to $625.18, and Cardano (ADA) fell by 0.2 per cent to $0.2480.
However, Dogecoin (DOGE) rose by 2.0 per cent to $0.1002, and TRON (TRX) appreciated by 0.2 per cent to $0.3242, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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