Economy
GCR Upgrades NEM Insurance Rating to A(NG)
By Dipo Olowookere
Global Credit Ratings has upgraded the national scale claims paying ability rating of NEM Insurance Plc to A(NG) from A-(NG), with the outlook accorded as Stable.
A statement issued by GCR explained that the rating, which remains valid until June 2019, was accorded based on the fact that NEM’s risk adjusted capitalisation is considered to be strong, supported by a sizeable capital base catering for the quantum of insurance and market risk exposures.
In this regard, the ratio of shareholders’ funds to net earned premium (NEP) rose to a review period high of 99.5 percent at FY17.
Sound internal capital generation and relatively well contained dividend distributions are likely to maintain risk adjusted capital adequacy within a strong range over the rating horizon.
Key liquidity metrics remained at strong levels, with cash coverage of technical provisions registering at 1x (FY16: 0.9x), while the average monthly claims cash cover ratio equated to 44 months at FY17 (FY16: 24 months).
GCR said it expects liquidity metrics to remain within a strong range going forward, supported by robust operating cash flow generation and conservative asset allocation.
Sound competitive positioning is supported by the insurer’s entrenched position in the market, with NEM holding an estimated 5.5 percent of total short term industry premiums in FY17.
Strong brand visibility, coupled with established broker relations is expected to provide continued premium generative capacity, with the insurer likely to defend its current market position, the rating firm explained.
It added that earnings capacity has been supported by consistent realised investment returns, although large fluctuations in underwriting results and fair value movements have induced a degree of margin volatility across the review period.
“While note is taken of the stabilisation in underwriting margins over the past two years (FY17: 16 percent; FY16: 13 percent), earnings capacity might remain volatile over the medium term, underpinned by variable claims patterns and fair value movements.
“The reinsurance programme reflects a moderately high level of counterparty strength, while maximum net retention per risk and event equated to a moderate 3.1 percent of FY17 capital (using the 2017 closing exchange rate).
“Upward rating movement could follow strengthening of the insurer’s business profile supported by strong credit protection metrics. However, the rating will be sensitive to a sustained deterioration in key credit protection metrics and/or sustained weakness in operating performance,” GCR said.
By Dipo Olowookere
Investors bought and sold 3.132 billion shares worth N76.552 billion in 61,456 deals at the Nigerian Exchange (NGX) Limited last week compared with the 2.252 billion shares valued at N58.831 billion traded in 63,657 deals in the preceding week.
Wema Bank, Secure Electronic Technology, and Access Holdings were the busiest equities during the week with the sale of 1.437 billion units valued at N15.406 billion in 5,292 deals, contributing 45.89 per cent and 20.13 per cent to the total trading volume and value, respectively.
In the week, financial stocks dominated the activity chart with 2.336 billion units worth N33.014 billion in 27,100 deals, contributing 74.59 per cent and 43.13 per cent to the total trading volume and value, respectively.
Services shares recorded 284.988 million units valued at N807.646 million in 4,638 deals, and consumer goods equities sold 139.010 million units for N5.704 billion in 6,469 deals.
Business Post reports that 44 stocks appreciated in the period under review versus 33 stocks of the preceding week, 44 equities also depreciated last week compared with the previous week’s 57 equities, and 64 shares closed flat, in contrast to the 62 shares recorded a week earlier.
SCOA Nigeria gained 59.68 per cent to trade at N3.96, UPDC appreciated by 19.05 per cent to N2.00, Coronation Insurance rose by 15.32 per cent to N2.56, Royal Exchange leapt by 14.61 per cent to N1.02, and DAAR Communications expanded by 13.51 per cent to 84 Kobo.
On the flip side, Sunu Assurances depleted by 25.11 per cent to N5.01, Eunisell lost 18.95 per cent to close at N12.66, John Holt went down by 18.47 per cent to N8.30, Abbey Mortgage Bank slumped by 14.60 per cent to N3.10, and Cornerstone Insurance depreciated by 14.29 per cent to N3.48.
After the five-day trading week, the All-Share Index (ASI) and the market capitalisation appreciated by 1.22 per cent and 1.26 per cent, respectively to 103,598.30 points and N63.645 trillion.
In the same vein, all other indices finished higher apart from the insurance, consumer goods, energy and sovereign bond indices, which depreciated by 1.20 per cent, 1.20 per cent, 0.93 per cent and 0.10 per cent, respectively while the ASeM index closed flat.
By Dipo Olowookere
It was a good day for the stock market in Nigeria as it appreciated by 0.79 per cent on Friday to bring the year-to-date return to 0.66 per cent.
This was influenced by renewed interest across most of the sectors of the market, though the insurance index declined by 2.15 per cent when trading activities ended for the session.
Business Post reports that the banking counter appreciated by 1.97 per cent, the consumer goods space grew by 0.70 per cent, the industrial goods sector gained 0.09 per cent, and the energy counter closed flat.
Yesterday, the All-Share Index (ASI) increased by 810.26 points to 103,598.46 points from the preceding day’s 102,788.20 points and the market capitalisation by N497 billion to N63.645 trillion from Thursday’s N63.148 trillion.
Chellaram was the biggest price gainer on Friday after it chalked up 10.00 per cent to trade at N4.07, Guinness Nigeria also appreciated by 10.00 per cent to N77.00, SCOA Nigeria improved by 10.00 per cent to N3.96, Transcorp Power jumped by 7.96 per cent to N349.80, and Lasaco Assurance went up by 7.19 per cent to N3.28.
Conversely, Neimeth was the biggest price loser as it shed 9.88 per cent to N3.10, John Holt declined by 9.78 per cent to N8.30, International Energy Insurance depleted by 9.74 per cent to N1.76, Sovereign Trust Insurance fell by 9.40 per cent to N1.06, and Austin Laz lost 9.00 per cent to close at N1.82.
As for the activity chart, a total of 576.4 million stocks valued at N9.0 billion in 11,546 deals compared with the 394.4 million stocks worth N22.8 billion traded in 12,160 deals in the preceding session, indicating a rise in the trading volume by 46.15 per cent, and a decline in the trading value and number of deals by 60.53 per cent and 5.05 per cent.
Secure Electronic Technology was the busiest equity with 202.2 million units worth N151.8 million, Nigerian Breweries traded 42.1 million units valued at N1.3 billion, Japaul exchanged 34.6 million units for N79.7 million, Access Holdings sold 32.2 million units valued at N807.0 million, and Sovereign Trust Insurance traded 17.0 million units worth N18.3 million.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.42 per cent gain on Friday, January 24 after three equities ended on the advancers’ chart at the close of business.
Nipco Plc gained N15.01 during the trading day to close at N165.11 per share versus N150.10 per share of the preceding session, Okitipupa Plc added N4.79 to end the session at N52.69 per unit compared with Thursday’s trading value of N47.90 per unit, and Central Securities Clearing System (CSCS) Plc expanded by 80 Kobo to trade at N24.00 per share, in contrast to the N23.30 per share it was sold a day earlier.
The gains recorded by these stocks pushed the value of the bourse higher by NN7.41 billion to N1.775 trillion from the N1.767 trillion recorded in the preceding session and the NASD Unlisted Security Index (NSI) grew by 6.93 points to wrap the session at 3,133.20 points compared with 3,120.13 points recorded in the previous session.
Yesterday, the price of FrieslandCampina Wamco Nigeria Plc went down by 92 Kobo to end the session at N38.58 per share, in contrast to the previous day’s N39.50 per share.
The volume of securities traded in the session decreased on Friday by 95.9 per cent to 16.3 million units from 407.4 million units, the value of shares traded yesterday slumped by 97.4 per cent to N10.2 million from N391.2 million units, and the number of deals declined by 23.3 per cent to 23 deals from 30 deals.
Impresit Bakolori Plc was the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.
Impresit Bakolori Plc was also the most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, trailed by Industrial and General Insurance (IGI) Plc with 26.3 million units sold for N6.3 million, and Geo-Fluids Plc with 9.2 million units valued at N44.3 million.
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