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Economy

Financial Stocks Surrender Market to Bears as ASI Sheds 0.05%

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local bourse bear market

By Dipo Olowookere

The bears made a return to the Nigerian Stock Exchange (NSE) on Thursday, thanks to the profit taking witnessed in the financial services sector.

The bourse depreciated during yesterday’s session by 0.05 percent despite an improvement in the activity level. The volume of transactions increased in the day by 84.03 percent to 150.7 million units from 81.9 million units, while the value of trades rose by 162.68 percent to N2.8 billion from N1.1 billion, with the number of deals rising by 32.48 percent to 3,198 from 2,414.

However, it was the poor outing of stocks in the insurance and banking sectors that led the market to the bears on Thursday. The insurance counter depreciated by 1.11 percent, while the banking space fell by 0.25 percent, with the consumer goods index marginally down by 0.01 percent.

The industrial goods index, which was the only gainer, appreciated by 0.79 percent, while the energy sector closed flat for the second day running.

The market breadth finished negative on Thursday with 15 price losers and 13 price gainers. MTN Nigeria led the decliners’ log with a N4 loss to settle at N116 per share.

NEM Insurance went down by 16 kobo to close at N2.04 per unit, UAC Nigeria fell by 15 kobo to end at N9.35 per share, Law Union and Rock Insurance declined by 12 kobo to trade at N1.10 per unit, while Zenith Bank crashed by 5 kobo to sell at N19.90 per unit.

Conversely, GTBank led the gainers’ table after adding N1.85 to its share price to trade at N30.85 per unit, while BUA Cement followed with a price appreciation of 50 kobo to quote at N35.80 per unit.

Flour Mills also rose by 50 kobo to close at N23 per share, United Capital appreciated by 26 kobo to trade at N2.86 per unit, while Learn Africa added 11 kobo to its share price to end at N1.24 per share.

It was observed that Zenith Bank and Flour Mills dominated yesterday’s trading session, selling 25.4 million shares worth N502.4 million and 25.1 million shares worth N574.5 million respectively.

United Capital transacted 21.8 million units valued at N59.0 million, UBA exchanged 10.9 million equities for N84.5 million, while MTN Nigeria traded 6.9 million stocks for N792.6 million.

Business Post reports that at the close of transactions on Thursday, the market capitalisation reduced by N7 billion to settle at N14.513 trillion in contrast to N14.520 trillion it ended the previous day, while the All-Share Index (ASI) went down by 13.59 points to 27,864.84 points from 27,878.43 points.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NEM Insurance Seeks Regulatory Approval for Share Reconstruction

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NEM Insurance

By Dipo Olowookere

The board of NEM Insurance Plc is seeking regulatory approval for its proposed share reconstruction, a notice from the Nigerian Exchange (NGX) Plc has confirmed.

Ms Lilian Dako, who signed the disclosure on behalf of the Head of Listings Regulation Department at the NGX, said the underwriting firm filed its application through its stockbroker, Apel Asset Limited.

NEM Insurance intends to redenominate the nominal value of its stocks from 50 kobo to N1 and then turn every two shares of 50 kobo into one share of N1.00 each.

At the moment, the total authorised shares of the company stand at 10,400,000,000 units of 50 kobo each but this will change to 5,200,000,000 units of N1.00 after the exercise.

However, the authorized share capital will remain at N5.2 billion both before and after the share reconstruction, according to the statement.

“Following the resolutions passed at the Annual General Meeting (AGM) of NEM Insurance Plc on June 24, 2021, trading license holders are hereby notified that Nigerian Exchange Limited has received an application from Apel Asset Limited for a proposed share reconstruction of NEM Insurance Plc.

“The share reconstruction involves redenomination of the nominal value of the company’s shares from N0.50 to N1.00, resulting in the consolidation of every 2 shares of N.50 each held in NEM Insurance Plc into one share of N1.00 each.

Analysis of the Company?s share capital, pre and post share reconstruction, is provided in the table below:

Details Pre Share Reconstruction                                      Post Share Reconstruction

Authorized share capital (N)    5,200,000,000                   5,200,000,000

Issued Share Capital (N)          5,016,477,989                    5,016,477,989

Nominal Value per share (N)   0.50                                   1.00

Total Authorized (Units)          10,400,000,000                  5,200,000,000

Total Issued Issues (Units)       10,032,955,535                  5,016,477,989

“Further information regarding the share reconstruction will be communicated in due course,” the notice from the exchange today stated.

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Economy

OPEC Extends Compensation for Nigeria, Others to June 2022

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OPEC Crude

By Adedapo Adesanya

The Organisation of the Petroleum Exporting Countries (OPEC) has extended the compensation period for defaulting countries in the ongoing oil cuts until June 2022.

This was contained in a statement by the group’s Secretariat, which noted that the extension was granted following requests by some of the underperforming countries.

Nigeria is one of the defaulters and the Vienna-based cartel had previously extended the deadline to submit their compensation plans latest by December 17.

The group reiterated the “critical” importance of adhering to full conformity and to the compensation mechanism.

For some of the countries involved in the Declaration of Cooperation, DoC had defaulted at trimming their cut quotas at some point in the agreement.

Reaffirming the decision of the 10th OPEC and non-OPEC Ministerial Meeting, ONOMM held on April 12, 2020, and July 18, 2021, the overall monthly production adjustment plan was adjusted by 400,000 barrels per day for the month of January 2022.

The group reaffirmed the continued commitment of participating countries in the DoC to ensure a stable and balanced oil market.

The biggest concerns were whether the emergence of a new variant of the coronavirus might torpedo the budding global economic recovery, and the restiveness of the United States and key Asian customers, including China, over high oil prices.

The 24th OPEC and non-OPEC Ministerial Meeting will be held on January 4, 2022.

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Economy

FarmTime Gets $50,000 to Boost Organic Fertilizer Production

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FarmTime Organic Fertilizer Production

By Dipo Olowookere

An agric-startup based in Tanzania, FarmTime Company Limited, has become the latest beneficiary of a new revenue-linked matching fund designed to incentivize investors to back younger entrepreneurs.

The firm, which was established in 2017 to recycle and repurpose plant and animal waste to produce organic fertilizers, delivering consistent and traceable nutrients at affordable prices, has secured a $50,000 funding support to expand its operations.

FarmTime, a new entrant to the organic fertilizer market in Tanzania, obtained the fresh capital in a round led by Umsizi Fund, which triggered a guaranteed match from the Young Entrepreneurs Fund (YEF).

YEF was launched in 2019 and provides matching investments of up to $50,000 to qualifying entrepreneurs. To date, over $250,000 has been invested across Africa with a growing pipeline of opportunities.

The scheme was designed to incentivise investments into very young entrepreneurs in Africa. It is a “guaranteed follow” fund that will match investments into ventures led by graduates of African Leadership Academy (ALA) programs, including The Anzisha Prize.

Rather than take equity positions, the fund has very intentionally chosen an innovative debt model with variable repayments linked to company revenues.

The founder of the latest beneficiary, FarmTime, Mr Jubilate Lema, disclosed that the new funds would be used to develop solutions to food security that balance human prosperity and the environment at large.

“I hope more funds take the approach of Umsizi and YEF with a revenue-linked debt instrument,” says Lema, “It was easy to understand, doesn’t load our cap table, and forced us to think about cash flow as well as growth.”

Josh Adler, Executive Director of The Anzisha Prize, which manages the fund on behalf of ALA, while commenting, stated that, “YEF is part of a growing move toward more structured exits from investors with a patient capital mandate.

“As a leadership development institution, ALA is able to draw in new forms of support for exceptional young leaders like Jubilate through the fund without having to build investment capabilities internally.”

As for Ed Brakeman from the Umsizi Fund, he said, “This one of the more exciting investments for us in some time with a revenue-linked loan in partnership with YEF.

“We’re eager to support FarmTime’s growth and are confident that we as investors will see returns while ensuring support for the business through the challenging period of product launch and revenue ramp-up.”

Since its inception five years ago, FarmTime has invested in research and product development, licensing and setting up a factory. It has already processed approximately 9,000 kilograms of coconut husks, 2,600 kilograms of fish waste, and 76 kilograms of seaweed, amongst other inputs.

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