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Nigerian Banks Lead In Equities’ N372b Loss

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Nigerian Banks Lead In Equities’ N372b Loss

nigerian banks

By Dipo Olowookere

Banking stocks suffered the most among 25 top losers in the equities’ market as share price decline left investors with a net capital loss of N372 billion.

There were 10 banking stocks among the top 25 that lost 30 per cent and above in the past eight months. Some of the top losers recorded as much as 60.1 per cent in equities price reduction.

Conversely, only one banking stock made the few top gainers’ within the period. Altogether, there are 15 banking stocks quoted on the Nigerian stock market.

Three other banking stocks recorded various gains, while a bank dropped by 12.3 per cent.

The Nation’s market intelligence at the weekend indicated that investors in banking stocks have suffered the highest losses with nearly three-quarters of quoted banking stocks running with double-digit losses. Losses in the banking sector generally significantly outweighed the overall market’s average loss, according to data review by The Nation.

The benchmark indices for the Nigerian stock market indicated eight-month average decline of 3.64 per cent, equivalent to a loss of N372 billion.

Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) closed August at N9.479 trillion as against its year’s opening value of N9.851 trillion. The All Share Index (ASI), which tracks prices at the Exchange, dropped to 27,599.03 points by the month-end as against its year’s opening index of 28,642.25 points.

Banking stocks were deep in the red with the troubled Skye Bank leading the top 25 losers with year-to-date loss of 60.13 per cent. The Central Bank of Nigeria (CBN) had sacked the board and management of Skye Bank over corporate governance issues. Diamond Bank followed with a loss of 54.35 per cent.

Other top losers in the banking sector included Ecobank Transnational Incorporate, -31.3 per cent; Fidelity Bank, -40.67 per cent; Sterling Bank, -49.18 per cent; Union Bank of Nigeria, -39.13 per cent; Unity Bank, -30.36 per cent; Wema Bank, -34.0 per cent; FBN Holdings, -40.53 per cent and FCMB Group, which market value had dropped by 39.64 per cent.

Stanbic IBTC Holdings meanwhile dropped by 12.3 per cent within the period.

While consolidation, steep price declines and emergence of highly capitalised non-bank stocks such as Dangote Cement had reduced the hitherto overwhelming dominance of the market by banking stocks, banking stocks still account for some 25 per cent of the total market value of the Nigerian equities market.

Head, financial advisory group, GTI Capital Group, Mr Kehinde Hassan, said the negative performance of the banking sector was weighing heavily on the overall market performance.

He noted that the unstable policy environment and the knee-jerk approach of the Central Bank of Nigeria (CBN) to regulatory decisions have compounded the tough operating environment for banks, many of which had warned of lower earnings due to the headwinds.

Only Guaranty Trust Bank (GTB) ranked within the top gainers’ list with 8-month gain of 45.76 per cent. United Bank for Africa (UBA) meanwhile posted a heart-warming return of 28.7 per cent. Access Bank followed with 14 per cent while Zenith Bank, against all expectations, trailed with a modest gain of 6.05 per cent.

Other top losers for the period included Livestock Feeds, -33.1 per cent; UACN Property Development Company, -42.5 per cent; Honeywell Flour Mills, -35.12 per cent; Vitafoam Nigeria, -43.99 per cent; AIICO, -30.77 per cent; Union Homes and Savings, -39.24; Fidson Healthcare, -32 per cent; GlaxoSmithKline Consumer Nigeria, -45.88 per cent; Berger Paints, -31.1 per cent; Cement Company of Northern Nigeria, -35.8 per cent; Lafarge Africa, -40.1 per cent; Portland Paints and Products Nigeria, -53.2 per cent; Forte Oil, -47 per cent; Tourist Company of Nigeria, -43.1 per cent and Caverton Offshore Support Group, which lost 40.9 per cent.

Nigerian equities have writhed under sustained losses in the past 32 months. Aggregate market value of all quoted equities on the NSE closed 2015 at N9.851 trillion as against its opening value of N11.478 trillion for the year, representing a loss of N1.627 trillion. The ASI indicated a negative full-year average return of -17.36 per cent. The ASI closed 2015 at 28,642.25 points as against its opening index of 34,657.15 points.

The losses in 2015 worsened the downtrend that had in 2014 marked out Nigerian equities among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities had closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

Altogether, investors have lost more than N3.75 trillion in the past 32 months as the stock market groaned under political tension, steep decline in crude oil prices, foreign exchange crisis, uncertain policies and other domestic and global macroeconomic concerns.

The second half of 2016 has however seen considerable share price recovery compared with the steep losses in the first half. In the first quarter alone, Nigerian equities had recorded a net loss of N1.15 trillion.

Notwithstanding the negative overall market situation, many stocks have posted substantial returns so far this year. Dangote Flour Mills, which saw the re-emergence of Aliko Dangote’s Dangote Industries Limited as the core investor, recorded the highest gain of 240.7 per cent. E-Tranzact followed with a gain of 97.4 per cent. United Capital returned 74.8 per cent while Total Nigeria posted eight-month return of 63.3 per cent. Other top gainers included Presco, 37.2 per cent; AG Leventis, 43.6 per cent; Union Dicon Salt, 39.3 per cent; Neimeth International Pharmaceutical, 32.6 per cent; DN Meyer, 30 per cent; Seplat Petroleum Development Company, 49.4 per cent; Eterna, 33.7 per cent and RAK Unity, a second-tier stock that posted a year-to-date return of 61.3 per cent.

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

Ellah Lakes, Enugu Government Seal Rice Processing Deal

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Ellah Lakes

By Dipo Olowookere

A Nigerian agribusiness company, Ellah Lakes Plc, has sealed an agreement with the Enugu State government for the processing of rice aimed to improve food security in the state and the nation at large.

The chief executive of the firm, Mr Chuka Mordi, described the deal as “a significant landmark for the company in fulfilling our strategic objective of diversifying our portfolio and production base.”

Ellah Lakes said in a statement that with the partnership, it will transform the Ada Rice Company and Plantation in Adani, Uzo-Uwani LGA, into a Staple Crop Processing Zone (SCPZ) in Enugu State.

This is expected to create not less than 5,000 jobs over the next 24 months as the company will have the opportunity to establish a feed mill and ethanol processing plant on the site in Adani.

Business Post reports that Adani community is well-known for the cultivation and production of rice but due to poor infrastructure and support of the government, it has suffered low patronage.

This partnership between the Enugu State government and Ellah Lakes should change the narrative for good and boost local production of rice.

In the statement issued on Wednesday by Ellah Lakes, a company listed on the trading platform of the Nigerian Exchange (NGX) Limited, work is scheduled to begin immediately in Adani.

“Ellah Lakes is happy to announce that it has entered into an agreement with the Enugu State Government, through the Enugu State Technical Committee on Privatisation and Commercialisation, for the expansion and further development of the Ada Rice Company and plantation in Adani, Uzo-Uwani LGA, into a Staple Crop Processing Zone (SCPZ) in Enugu State, Nigeria.

“Ellah Lakes will produce and process rice with the participation of over 200 indigenous farmers in the local out-grower program. Ellah Lakes will also develop a feed mill and ethanol processing plant on the site in Adani.

“The development is expected to create a minimum of 5,000 jobs over the next 24 months, and work is scheduled to begin immediately,” a part of the statement disclosed.

“This is a significant landmark for the company in fulfilling our strategic objective of diversifying our portfolio and production base, and we are very excited to be working with the Enugu State Government.

“We are very pleased with this collaboration with the very progressive government of Enugu State. For us, this is the beginning of a great journey to expand the industrial base of the state, and we look forward to a mutually beneficial, valuable and fruitful venture,” Mr Mordi was quoted as saying.

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Economy

Stanbic IBTC Pension Managers Rewards Customers

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Stanbic IBTC Pension Managers scheme

Ahead of the festive season, Stanbic IBTC Pension Managers, Nigeria’s largest Pension Fund Administrator (PFA), has unveiled the Stanbic IBTC Pension Managers Loyalty Program tagged Umatter.

It is a reward scheme targeted at the customers of the PFA, to reward them for their loyalty and patronage through exclusive discounts as they shop with their e-loyalty card.

The loyalty program is available at the PFA’s partner merchants’ locations and stores across the nation. It is aimed at providing Stanbic IBTC Pension Managers’ customers with exciting shopping discounts to help them spend less and save more when they shop.

Some of the participating merchant outlets are Maybrands, Café Royale, Hubmart Stores, Chocolate Royal, La Campagne Tropicana, Physio Centers of Africa, Medplus, iStore, Oriki, Launderland and Active Leisure.  The discounts range from 5 to 12 per cent on products and services purchased.

Stanbic IBTC Pension Managers’ partnerships with these major outlets will enable customers to seamlessly enjoy instant discounts on their purchases during this festive period, thereby making life even more easy and affordable for customers who use the Stanbic IBTC Pension Managers e-loyalty card.

Stanbic IBTC Pension Managers will continue to initiate valuable programs like this that encourage people to continue saving for their retirement and building their financial future.

New and existing customers can be a part of this exciting loyalty program by visiting www.stanbicibtcpension.com or calling 01 271 6000.

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Economy

FG to Inject N381trn into Economy to Create Job, Tackle Poverty

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Nigeria Economy challenges

By Adedapo Adesanya

The federal government is partnering with the Industrial Training Fund (ITF) to inject N381 trillion into the economy to cushion the growing rate of poverty, job losses and economic degradation in Nigeria.

This was disclosed by the Director-General of the Fund, Mr Joseph Ari, during a media interaction with the Correspondent Chapel of the Nigeria Union of Journalists in Jos.

Mr Ari said the federal government came up with a 5-year National Development Plan tied around the sum of money to be able to achieve this aim.

He said the plan will replace the initial Economic Recovery and Growth Plan (EGRP).

According to him: “The plan, which projects the creation of 21 million jobs, with 35 million Nigerians lifted out of poverty, affordable housing for Nigerians and an export-led economy among others, is expected to cost N381 trillion to implement and have six focal areas of economic growth and development, infrastructure, public administration, human capital development, social development and regional development.

“As the leading human capital development institution in Nigeria, we have commenced the process of repositioning our programmes and activities to effectively prepare the Nation’s workforce in line with our mandate of developing a pool of qualified Nigerians to man the public and private sectors of the national economy as we believe that for this plan to succeed, all Nigerians as individual citizens and as institutions must contribute their bit.

“You will recall that on the assumption of office in 2016, the economy was in recession leading to massive job losses and corresponding increases in poverty.

“Our initiatives then particularly the emphasis on skills intervention programmes was borne out of the need to drive the actualization of the Economic Recovery and Growth Plan (EGRP), which we achieved to an appreciable degree by training hundreds of thousands of Nigerians that are today gainfully employed or even employers of labour,” Mr Ari said.

He, however, lauded the media for a robust coverage of the Funds activities over the years, saying that the media has been critical in return of peace in the state.

“Beyond this, fora such as we are holding today have been critical to the return of peace in plateau state, thereby creating the necessary environment for our organisation to thrive especially within the last five years on account of your professionalism and determined efforts to rise above sensationalism, headline-grabbing and petty politics,” Mr Ari said.

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