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Stock Exchange Begins Process to Delist Tourist Company of Nigeria

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Tourist Company of Nigeria

By Dipo Olowookere

Tourist Company of Nigeria may soon become the next organisation to be delisted from the Nigerian Exchange (NGX) Limited, Business Post has learned.

Information reaching this newspaper authoritatively revealed that the NGX Regulations (NGX RegCo) Limited, a subsidiary of the NGX Group saddled with the responsibility of regulating the market, has been given the approval to begin the process of ejecting the firm from the exchange.

Tourist Company of Nigeria recently suspend

Recall that a few days ago, the Tourist Company of Nigeria was among the four companies suspended from the stock exchange for issues relating to poor corporate governance.

“Trading license holders and the investing public are hereby notified that pursuant to Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, (Default Filing Rules), which provides that, ‘If an issuer fails to file the relevant accounts by the expiration of the cure period, the exchange will: a) send to the issuer a second filing deficiency notification within two business days after the end of the cure period; b) suspend trading in the issuer’s securities; and c) notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension,’ trading in the shares of the four companies has been suspended from the facilities of the Nigerian Exchange Limited effective Friday, July 2, 2021, having failed to file their audited financial statements for the year ended December 31, 2020.

“In accordance with the Default Filing Rules set forth above, the suspension of trading in the shares of the above-mentioned companies will only be lifted upon the submission of the relevant accounts, provided NGX Regulation Limited is satisfied that the accounts comply with all applicable rules of the exchange,” a statement from the NGX had read.

Delisting in Process

But the issue of the Tourist Company of Nigeria is not ending with suspension on trading of its stocks on the exchange like the other three.

The NGX is going further to remove the company from its platform and it has now placed it on its delisting in process category, with a Compliance Status Indicator (CSI) code of DIP, which means delisting in process.

Background to current issues

Tourist Company of Nigeria is one of the oldest firms on the exchange as it joined on January 1, 1970, according to its profile of the NGX.

Its nature of business is the operation of hotels, casinos and the provision of catering services. It operates the popular Federal Palace Hotel in Lagos. It has shares outstanding of 2,246,437,472 units and a market value of N6.4 billion and its last equity price was N2.84 each.

This is not the first time the firm is under the threat of being delisted on the exchange.

According to information gathered by Business Post, in 2015, the organisation was informed by the exchange of its intention to remove it from its platform as a result of free float deficiency issues and the board passed a resolution authorising the exchange to go ahead with this.

However, after about two years, the NGX said it was putting the delisting on hold because of corporate governance issues at Ikeja Hotel Plc, which is one of the key shareholders of the company.

Shareholding structure

Ikeja Hotel, another firm listed on the exchange, has a 12.2 per cent stake in the Tourist Company of Nigeria, according to its financial statements. Sun International Limited controls 49.3 per cent, Associated Ventures International Limited (a firm controlled by Goodie Ibru, a former Chairman of the company) has 18.7 per cent, while Oma Investments Limited (which is challenging the legality of the company’s operating management agreement currently in place for the management of TCN) has 18.1 per cent.

Financial performance

In its unaudited financial statements for 2020, Tourist Company of Nigeria reported a significant decline in revenue, especially from its gaming and hospitality business and this was mainly due to the restriction on movements and the shutting down of businesses in the year by the federal government to control the spread of COVID-19.

The company suffered a loss after tax of N6.5 billion in the year compared with the lost after tax of N1.2 billion reported in 2019.

Tourist Company of Nigeria has been making losses historically and has accumulated losses of N20.6 billion, higher than N14.1 billion in 2019.

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

Inflation in Nigeria Jumps to 16.82% in April 2022

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inflation rate Nigeria

By Aduragbemi Omiyale

The National Bureau of Statistics (NBS) on Tuesday disclosed that inflation in Nigeria increased by 16.82 per cent in April 2022 from the 15.92 per cent recorded in March 2022.

However, on a year-on-year basis, the rate moderated by 1.3 per cent as inflation was 18.12 per cent in the corresponding month of 2021.

The NBS disclosed that the percentage change in the average composite consumer price index (CPI) for the 12 months period ending April 2022 over the average of the CPI for the previous 12 months period was 16.45 per cent, 0.1 per cent lower than the 16.54 per cent recorded in March 2022.

It also stated that in the month under review, the urban inflation rate increased to 17.35 per cent (year-on-year) in April 2022 from 18.68 per cent recorded in April 2021, while the rural inflation rate increased to 16.32 per cent in April 2022 from 17.57 per cent in April 2021.

On a month-on-month basis, the urban index rose to 1.78 per cent in April 2022, up by 0.02 from the rate recorded in March 2022 at 1.76 per cent, while the rural index also rose to 1.74 per cent in April 2022, up by 0.01 from the rate that was recorded in March 2022 at 1.73 per cent.

The corresponding 12-month year-on-year average percentage change for the urban index is 17.01 per cent in April 2022, lower than 17.10 per cent reported in March 2022, while the corresponding rural inflation rate in April 2022 is 15.91 per cent compared to 16.00 per cent recorded in March 2022.

In the report, the stats agency said in April 2022, the composite food index rose by 18.37 per cent in contrast to the 22.72 per cent achieved in April 2021, attributing the increase to a hike in the prices of bread and cereals, food products n.e.c, potatoes, yam, and other tubers, wine, fish, meat, and oils.

On a month-on-month basis, the food sub-index increased to 2.00 per cent in April 2022, up by 0.01 per cent points from 1.99 per cent recorded in March 2022, the report added.

It was further stated that the average annual rate of change of the food sub-index for the 12-month period ending April 2022 over the previous 12-month average is 18.88 per cent, 0.34 per cent points from the average annual rate of change recorded in March 2022 at 19.21 per cent.

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Economy

OTC Securities Exchange Closes 0.02% Lower

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NASD OTC Securities Exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed marginally lower by 0.02 per cent on Monday on the back of a price depreciation in Central Securities Clearing Systems (CSCS) Plc.

The stock, which was the only price loser yesterday, went down by 5 kobo or 0.29 per cent to sell at N16.95 per unit compared to the previous session’s N17.00 per unit.

At the close of transactions, it reduced the market capitalisation of the OTC securities exchange by N250 million to N1.05 trillion from N1.06 trillion and sliced the NASD Unlisted Securities Index (NSI) by 0.19 points to 807.56 points from 807.75 points.

Business Post observed that the level of activity during the session was low as the volume of securities recorded a decline of 99.8 per cent to 61,131 units from 7.5 million units, the value of trades also depreciated by 99.8 per cent to N4.6 million from N2.2 billion, while the number of deals remained unchanged at 11 deals.

AG Mortgage Bank Plc closed the session as the most traded stock by volume (year-to-date) with 2.3 billion units worth N1.2 billion, CSCS Plc was in second place with 661.6 million units worth N13.9 billion, while Food Concepts Plc held the third position with 94 million units worth N77.8 million.

But the most active stock by value (year-to-date) was CSCS Plc with 661.6 million units valued at N13.9 billion, VFD Group followed with 9.4 million units valued at N2.9 billion, and AG Mortgage Bank Plc with 2.3 billion units valued at N1.2 billion.

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Economy

FX Supply Crisis Weakens Naira to N421.50/$ at I&E

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devalue naira

By Adedapo Adesanya

The rationing of foreign exchange (FX) to traders in Nigeria by the Central Bank of Nigeria (CBN) amid a shortage in supply is putting the Naira under pressure.

At the Investors and Exporters (I&E) segment of the market on Monday, the Nigerian currency depreciated by 0.6 per cent or N2.50 against the US Dollar to N421.50/$1 from the previous session’s N419.00/$1.

According to data from the FMDQ Securities Exchange, FX traders could not execute many transactions yesterday as they could not meet the high demand for forex from their customers.

FX trades valued at $70.68 million were carried out during the session compared with the $169.38 million executed last Friday, indicating a shortfall of 58.3 per cent or $98.7 million. Amid these low FX deals, the Naira could not gain strength against its American counterpart due to a shrink in the supply end.

At the spot market, the local currency also depreciated against the Pound Sterling on Monday by N2.17 to trade at N509.50/£1 versus the preceding session’s N507.33/£1 and lost N1.18 against the Euro to close the day at N433.05/€1 compared with N431.87/€1 of the previous day.

But at the Peer-to-Peer (P2P) window, the Nigerian Naira appreciated by N1 against the greenback to trade at N614/$1 in contrast to the preceding session’s value of N615/$1.

At the cryptocurrency market, things continued to worsen for the Luna-backed coin, TerraUSD (UST) as it plunged by 27.8 per cent to trade at $0.1269.

This is coming as Luna Foundation Guard, a fund set up by Terra creator, Mr Do Kwon, said on Monday that the company spent almost all of the Bitcoin in its reserve last week in a futile attempt to save UST.

It was joined yesterday by Cardano (ADA), which depreciated by 0.2 per cent to sell at $0.5742.

However, Litecoin (LTC) gained 3.7 per cent to trade at $70.56, Solana (SOL) improved by 2.6 per cent to $56.77, Binance Coin (BNB) appreciated by 1.3 per cent to $305.71, Ripple (XRP) recorded a 1.2 per cent gain to trade at $0.4356, Dogecoin (DOGE) rose by 0.3 per cent to $0.0899, Bitcoin (BTC) increased by 0.2 per cent to $30,358.88, Ethereum (ETH) went up by 0.1 per cent to $2,075.77, while the US Dollar Tether (USDT) also gained 0.1 per cent to sell for $0.9989.

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