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Economy

Excitement as Stock Investors to Pocket N780bn Dividends

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Stock Investors

By Aduragbemi Omiyale

More than N780 billion will be pocketed by stock investors in Nigeria as dividends proposed by various companies listed on the Nigerian Exchange (NGX) Limited in the coming weeks and months.

The market has been bubbling with activities as a result of the recently proposed dividends from companies, with shareholders rebalancing their portfolios and taking positions.

So far, 16 companies across seven sectors including consumer goods, financial services, industrial goods, oil and gas, services, healthcare and IT, have paid out a total of N782.2 billion as the final dividend payout for the year ended December 31, 2021.

The dividend has remained one of the key factors that traditionally drive stock market activities and aids investment decisions towards stocks across the globe, and the Nigerian bourse is not an exception.

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business called retained earnings and pay a proportion of the profit as a dividend to shareholders.

For the period under review, under the consumer goods sector, Vitafoam paid N1.876 billion, representing N1.50 per share. Dangote Sugar Refinery proposed a final dividend of N12.147 or N1.00 per share, while Nestle Nigeria declared a N20.213 billion dividend of N25.50 per share.

NASCON Allied Industries and Nigerian Breweries set to pay dividends of N1.060 billion and N9.691 billion, representing 40 kobo per share and N1.20 per share, respectively.

Under the financial services sector, shareholders of United Capital, African Prudential, Guaranty Trust Holding Company (GTCO), Zenith Bank and United Bank for Africa (UBA) will receive a total dividend of N9 billion, N1 billion, N79.464 billion, N87.910 and N27.360 billion, representing N1.50 per share, 50 kobo per share, N2.70 per cent, N2.80 per cent and 80 kobo per share in that order.

Also, Dangote Cement and Lafarge Africa listed under the industrial goods sector proposed a final dividend of N340.82 billion, representing N20 per share and N16.108 billion or N1 per share, respectively. Seplat Energy to pay a dividend of $0.426 cent per cent, making a total payout of N250.677 million in naira, while Transcorp Hotels, listed under services sector declared a dividend of N716.977 million or seven kobo (N0.07) per share.

Neimeth International Pharmaceuticals proposed N132.941 million final dividend or seven kobo (0.07) per share, while MTN Nigerian Communications (MTNN) declared a final dividend of N8.57 per share, amounting to N174.442 billion.

Speaking on the development, the Chief Executive Officer, NGX, Mr Temi Popoola, stated that the NGX has continued to be innovative and leverage technology to drive much more activity in the market.

Mr Popoola while stating that NGX strategy for 2022 said the exchange intends to keep building on the momentum on its digital journey across value chains adding that there may be digitalized listings and digitization of its product or offerings.

He noted that this is important because the belly of the Nigerian demography is huge and the exchange currently represented by older people, needs the young generation to bridge that gap, technology is needed and revealed that lots of work will be on the experience, retail, integration of its market to financial service players, especially banks.

While expressing confidence that few listings will take place on the platform of NGX, Popoola said the exchange is looking at diversifying the types of listings across foods, power, agriculture, hence having representation of GDP on the nation’s bourse.

NGX boss further added that the exchange will be partnering with the Securities and Exchange Commission (SEC) in launching a NASDAQ style board- a technology board that will be suited better for technological companies to be flexible enough to find capital formation on the exchange as well as attract capital into Nigeria, for Nigerians in the Diaspora and for investors (foreign and local investors).

Furthermore, market analysts noted dividend-paying stocks is very important to income investors for many reasons, saying that the reason is that dividend payment is playing a role in stock valuation.

“Beyond valuation, dividend-paying stocks can be a good source of stable income streams.  Many investors will want to invest in companies with a history of growing dividends,” they said.

Market analyst and Managing Director/CEO APT Securities and Funds Limited, Mr Garba Kurfi commended listed companies for posting impressive results and accounts for 2021, expressing concerns that the declared dividend by these companies did not reflect in the trajectory of the stock market.

According to him, these companies have declared impressive dividend payout to investors but I do not know why the stock market did not respond to dividend payout by Dangote Cement, Zenith Bank, among others. Although the likes of GTCO and UBA released their audited accounts after the close of trading last week, I am yet to see stock price appreciation.

“Take, for instance, Lafarge Africa last year was trading at N31 and declared N1.00 per ordinary but this year, the company declared N2.00 and trading at N24.00 per share. The dividend by these companies has not reflected in our domestic market.”

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Economy

Nigeria’s Pension Funds Reach N14.27bn as Contributors Near 10 million

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Pension Funds

By Adedapo Adesanya

The National Pension Commission (PenCom) says the total number of registered contributors and the value of pension fund assets stand at 9,795,957 million and N14.27 trillion respectively, as at June 2022.

The Director-General of PenCom, Mrs Aisha Dahir-Umar, gave the figures at a recent workshop themed Increasing Informal Sector Participation In The Contributory Pension Scheme (CPS): The Case for Micro Pension Plan (MPP).

Mrs Dahir-Umar, represented by the Head, Corporate Communications, Mr Abdulqadir Dahiru, said the increasing number of pension funds and contributors was responsible for the recapitalisation of the Pension Fund Administrators (PFA’s) by PenCom.

“The reason for the recapitalisation exercise was to ramp up the capacity of the PFA’s to manage the increasing number of registered contributors and the value of pension fund assets which stood at 9,795,957 million and N14.27 trillion respectively, as at June 30, 2022.

“PenCom increased the Minimum Regulatory Capital (Shareholders’ Fund) requirements of PFAs from N1 billion to N5 billion in 2021.

“All PFAs have complied with the commission’s directive to increase their minimum capital during the exercise which had a 12-month transition between April 27, 2021, and April 27, 2022,” she said.

According to her, the theme of the workshop aligned with the commission’s objective of expanding coverage of the CPS as it relates to the micro pension plan.

The director-general explained that the objective was to bring into the CPS, Nigerians working in the informal sector and those who were self-employed through the MPP.

Mrs Dahir-Umar noted that strategic efforts to drive the MPP remained one of the significant areas of focus of the commission.

She said the MPP was conceptualised to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders, artisans and entrepreneurs.

“The MPP was implemented to curb old-age poverty by assisting the workers, as mentioned above, to contribute while working and build long-term savings to fall back on when they become old, ” Mrs Dahir-Umar said.

The director-general stated that to create awareness of the MPP, the commission, in collaboration with the Pension Fund Operators Association of Nigeria, was currently championing an industry media campaign in major cities in the country’s six geopolitical zones.

She said it was expected that the exercise would bring about increased effectiveness and efficiency as well as improved service delivery in the industry.

“Let me re-affirm the commission’s commitment to creating awareness and holding social dialogue on the workings of the CPS with relevant stakeholders towards the smooth implementation of the scheme in Nigeria,” she said.

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Economy

Outrage Over Payment of N18.39bn Daily for Fuel Subsidy

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fuel subsidy

By Adedapo Adesanya

Some Nigerians have started to express anger over the disclosure by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, that the sum of N18.39 billion is used by the federal government daily to pay for fuel subsidy.

Speaking during an investigative hearing of the House of Representatives ad hoc committee looking into the petroleum subsidy regime between 2017 and 2021, the Minister revealed that, “The total amount of subsidy per day is N18.397 billion per day.”

“So, if you are projecting for the full year, it would be N6.715 trillion. If you are projecting for half year, it would be 50 per cent of that,” she informed the lawmakers.

According to the Finance Minister, this was calculated using the information provided by the Nigerian National Petroleum Company (NNPC) Limited and the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

She said the information showed that 64.96 million litres of fuel are the projected average daily truck out, adding that N1.774 trillion was paid to independent oil marketers as subsidy in four years.

Aside from the increasing cost of petrol importation, economic and energy experts have continued to decry the rising cost of fuel subsidy by the federal government.

In January, the federal government said it will retain fuel subsidy indefinitely and amended the 2022 budget to provide funds for that purpose, a move that saw the provision jump over 800 per cent to N4 trillion.

Mrs Ahmed, at that time, said the government realised that the timing of the planned removal of the petrol subsidy was problematic and would worsen the suffering of Nigerians.

According to her, all payments on fuel subsidies were supposed to cease from July 2022 but, “subsequent to the passage of the [Finance] Act, we went back to amend the Fiscal Framework that was submitted to the National Assembly to incorporate this demand, but after the budget was passed we have had consultations with a number of stakeholders.

“It became clear that the timing is problematic, that practically there is still heightened inflation, and also removal of subsidy will further worsen the situation, thereby, imposing more difficulties on the citizens, and Mr President clearly does not want to do that.”

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Economy

Naira Exchanges at N694/$1 in Peer-to-Peer FX Segment

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Nigerian Naira

By Adedapo Adesanya

The Naira depreciated against the United States Dollar at the Peer-to-Peer (P2P) window of the foreign exchange market on Thursday by 0.32 per cent or N2 to sell for N694/$1 in contrast to the preceding day’s rate of N692/$1.

However, it closed flat against the greenback in the Investors and Exporters (I&E) segment of the FX market at N429.38/$1 amid a slump in the value of transactions at the ecosystem.

According to data from the FMDQ Securities Exchange, forex transactions worth $63.30 million were carried out during the session compared with the $120.46 million reported a day earlier, indicating a decline by $57.16 million or 47.5 per cent.

But at the interbank segment, the local currency moved in the same direction on Thursday, appreciating against the British Pound Sterling and against the Euro.

It was observed that the domestic currency appreciated against the Pound Sterling by N1.72 to trade at N508.24/£1 compared to the previously traded rate of N509.96/£1 and against the Euro, the Naira gained N11.06 to settle at N420.83/€1 compared with the previous day’s N431.89/€1.

Also, in the black market, the domestic currency improved its value by N2 to trade at N678/$1 in contrast to the N680/$1 it was sold on Wednesday.

Meanwhile, in the cryptocurrency market, investors counted more losses as the appetite for the digital coins waned, with Shiba Inu (SHIB) dropping 9.9 per cent to sell for $0.00001343 and Dogecoin (DOGE) losing 8.4 per cent to close at $0.07429.

Cardano (ADA) depreciated by 8.1 per cent to settle at $0.4951, Solana (SOL) slumped by 6.2 per cent to sell at $38.30, Binance Coin (BNB) slid by 5.0 per cent to close at $291.64, Ripple (XRP) depreciated by 3.7 per cent to finish at $0.3616, Litecoin (LTC) went down by 3.0 per cent to quote at $58.99, Bitcoin (BTC) recorded a 2.5 per cent drop to end at $22,818.66, while Ethereum (ETH) retreated by 1.5 per cent to trade at $1,817.11, with the US Dollar Tether (USDT) retaining its previous day’s value of $1.00 due to the strong performance of the US Dollar against other currencies.

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