Economy
Shareholders Not Enjoying Benefits of NSE Listing—First Aluminium
By Modupe Gbadeyanka
It is a known fact that companies join the stock exchange to widen their prospect of getting funds to expand their operations, but the board of First Aluminium Nigeria Plc said this has not been the case with the company.
This week, the board of aluminium firm explained why they want to exit the Nigerian Stock Exchange (NSE) by delisting shares of First Aluminium from the bourse.
According to the board, the inactivity on the shares of the company as well as the inability of the current listing to help in realizing the corporate objectives of the company are the main reason behind the delisting.
The firm had intended to raise fresh capital to boost its operations, but its current illiquidity has rendered this primary corporate objective unattainable.
According to the company, over the last 12 months, there has been a significant fall in average daily trading volumes to 2,918 shares between July 2017 and June 2018 and further dip to 2,816 shares between July 2018 and December 2018.
“Neither the company nor any shareholder is benefiting from the continued listing on the NSE. Furthermore, rationalization of operational expenses to support the company’s business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements including filing fees, penalties or sanctions, are not commensurate with the benefits to the company,” First Aluminium stated.
According to the company, over the past seven years, there have been little or no trading activity on the shares held by the minority shareholders while the share price was stuck at 50 kobo for about six years. It has since dropped further below nominal value.
“Shareholders are not benefitting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” First Aluminium added.
ALUCON Holdings SA, the majority core investor that holds about 75.48 percent equity stake in First Aluminium Nigeria, is offering to buy out willing minority shareholders, which represents about 24.52 percent equity stake in the company.
ALUCON Holdings is offering to pay 55 kobo per share. Alternatively, shareholders can trade their shares on the NSE. However, a shareholder that desires to remain a shareholder of an unlisted First Aluminium Nigeria Plc shall be free to do so.
The company noted that the voluntary delisting will offer exit opportunities to shareholders who do not wish to remain in an unlisted public company.
Following a resolution by the board of directors of the company on August 08, 2018, shareholders of First Aluminium Nigeria had at the annual general meeting on September 25, 2018 approved the voluntary delisting of the entire issued share capital of 2.11 billion ordinary shares of 50 kobo each. First Aluminium Nigeria was listed on the NSE in 1992.
The voluntary delisting will become effective upon the obtainment of the written approval of the NSE.
By Adedapo Adesanya
The duo of FrieslandCampina Wamco Nigeria Plc and Food Concepts Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.21 per cent on Friday, April 4.
FrieslandCampina Wamco Plc lost N1.86 to close at N36.80 per unit compared with Thursday’s closing value of N38.66 per unit, and Food Concepts Plc recorded a 1 Kobo decline to end at N1.17 per share versus the preceding session’s N1.18 per share.
This dragged down the NASD Unlisted Security Index (NSI) by 6.88 points at the close of business to 3,309.46 points from the previous day’s 3,316.34 points and the market capitalisation dropped N3.97 billion to settle at N1.911 trillion, in contrast to the N1.915 trillion it ended at the preceding session.
At the unlisted securities yesterday, the volume of trades increased by 247.9 per cent to 1.3 million units from the 372,568 units transacted in the previous trading day.
Equally, the value of transactions surged by 23.2 per cent to N1.3 million from N4.1 million, but the number of deals went down by 50 per cent to 20 deals from the 40 deals recorded on Thursday.
When the bourse ended for the session, Impresit Bakolori Plc remained the most active stock by volume on a year-to-date basis with a turnover of 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 71,2 million units worth N24.2 million, and Geo Fluids Plc with 44.2 million units sold for N89.4 million.
FrieslandCampina Wamco Nigeria Plc also remained as the most traded equity by value on a year-to-date basis with the sale of 13.8 million units valued at N534.7 million, followed by Impresit Bakolori Plc with 533.9 million units worth N520.9 million, and Afriland Properties Plc with 17.8 million units sold for N364.2 million.
By Adedapo Adesanya
The Naira extended its loss against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 1.45 per cent or N22.49 on Friday, April 4.
Data from the Central Bank of Nigeria (CBN) showed that the local currency was exchanged to a Dollar at N1,573.23/$1 during the session compared with the N1,550.74/$1 it was transacted on Thursday.
Similarly, the domestic currency weakened against the Euro in the official market yesterday by N2.91 to settle at N1,725.29/€1, in contrast to the previous day’s N1,722.38/€1 but on the British Pound Sterling, it appreciated by N12.27 to sell for N2,031.02/£1 versus the preceding session’s N2,043.29/£1.
In the black market, the Nigerian currency lost N10 against the greenback on Friday to trade at N1,570/$1 compared with the N1,560/$1 it was transacted a day earlier.
The Naira’s negative outcome aligns with a wider slowdown in the global financial markets as retaliatory tariffs weaken outlook and raise possibility of a recession.
Already, Nigeria could face lower foreign exchange earnings from oil, which could be impacted heavily by tariffs.
As for the cryptocurrency market, it remained mixed after China announced retaliatory tariffs on all goods, responding to President Donald Trump’s Wednesday decision to boost the overall levy on Chinese goods to 54 per cent.
The concensus is that China’s response is not only negative for the US but it is also impacting the global outlook.
Binance Coin (BNB) shed 0.5 per cent to close at $594.69, Cardano (ADA) went down by 0.5 per cent to $0.6561, Litecoin (LTC) dropped 0.4 per cent to close at $84.09, Bitcoin (BTC) tumbled by 0.05 per cent to $83,444.13, Ethereum (ETH) declined by 0.04 per cent to $1,810.12, and the US Dollar Tether (USDT) moderated by 0.03 per cent to $0.9997.
On the flip side, Ripple (XRP) jumped by 3.1 per cent to $2.13, Solana (SOL) appreciated by 2.8 per cent to $120.63, and Dogecoin (DOGE) leapt by 2.4 per cent to $0.1690, while the US Dollar Coin (USDC) closed flat at $1.00.
By Adedapo Adesanya
Crude oil prices plunged by 7 per cent on Friday as China ramped up tariffs on US imports, escalating a trade war that has led investors to believe a recession is near.
This brought down the price of Brent crude by $4.56 or 6.5 per cent to sell at $65.58 per barrel and the US West Texas Intermediate (WTI) crude lost $4.96 or 7.4 per cent to end at $61.99 per barrel.
For the week, Brent was down by 10.9 per cent, its biggest weekly loss in percentage terms in a year and a half, while WTI posted its biggest decline in two years with a drop of 10.6 per cent.
As a result of this, prices slipped to their lowest level in almost four years Friday.
China said on Friday that it will impose a 34 per cent tariff on all US imports from April 10, in a response to US President Donald Trump levying 34 per cent duties on Chinese imports as part of a wider spree on 180 countries.
Retaliation from nations around the world could hurt economic growth and demand for key commodities such as crude oil and refined products.
China, the world’s largest oil importer, also imposed export controls on several rare earth elements — crucial for advanced technologies and almost exclusively mined in China — and banned Chinese firms from selling components to an additional 11 American companies.
Market analysts warned that China’s retaliatory measures have boosted fears of a global recession.
JP Morgan raised the probability of a US and global recession by year end to 60 per cent on Friday, forecasting that the effects of President Trump’s levies are “likely to be magnified through retaliation, a slide in US business sentiment and supply chain disruptions.”
On its part, Goldman Sachs analysts cuts their 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively.
Further pressuring oil prices, the Organisation of the Petroleum Exporting Countries and allies (OPEC+) decided to advance plans for output increases.
The group now aims to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 barrels per day.
A ruling by a Russian court that the Caspian Pipeline Consortium’s (CPC) Black Sea export terminal facilities should not be suspended also pressured prices lower. This decision could avert a potential fall in Kazakhstan’s oil production and supplies.
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