In a sign that the Nigerian Stock Exchange (NSE) is waking up from its slumber, it on Friday issued a notice suspending trading in the shares of 17 companies for non submission of their results.
It claims the suspension is in line with its guidelines which gives it the powers to suspend any quoted company that did not release its results within a stipulated period.
The suspension is effective July 5th 2017 and includes a list of 17 companies out of which 7 are insurance firms. The NSE also reveals that the suspension will remain in place until the submission and approval of the required results by the exchange.
The suspended companies are listed below.
- African Alliance Insurance Plc
- Equity Assurance Plc
- Fortis Microfinance Bank Plc
- Guinea Insurance Plc
- Premier Paints Plc
- Resort Savings & Loans
- Sovereign Trust Insurance Plc
- African Paints (Nigeria) Plc
- Aso Savings & Loans Plc
- Ekocorp Plc
- Evans Medical Plc
- Goldlink Insurance Plc
- Great Nigeria Insurance Plc
- Omatek Ventures Plc
- Union Dicon Salt Plc
- Union Homes Savings & Loans Plc
- Universal Insurance Company Plc
On the suspension
The NSE has been criticized by a section of investors (Nairametrics inclusive) for taking too long to wield the big stick on rogue listed companies who continue to flout listing rules, despite the obvious risk they pose to investor funds. The Nigerian Stock Exchange has had a history of seeing quoted companies that are yet to release any result embark on bullish runs leading to gains of over 100% in some cases. Union Dicon, which is included in this list, some mid 2016 rallied from about N10 t0 N17 despite not having released its results. It is often considered an anomaly for a listed company that has failed to produce any results or corporate action for years, suddenly see its share price mount a bullish run.
We now hope that this step in the right direction will be sustained.
Will the suspension be lifted ?
Eventually after the companies have paid the required fines and submitted their results, the suspension will be lifted. Since some of the companies have their results pending before regulators, they may remain suspended on the exchange for a while.
Can I buy or sell during suspension
Shares of any of these companies cannot be traded on the Nigerian Stock Exchange during the period of the suspension. If you own these shares and wish to sell, you will not be able to sell.
What if the companies never get to lift their suspension?
If this occurs the NSE will have no choice but to delist these companies from the exchange. Therefore, if you were to sell the shares, it will have to be either crossed or sold on the NASD (a market where unlisted shares are traded).
Here is a copy of the press release.
Dangote Sugar lists additional ordinary shares on NSE
This arose from the Scheme of Merger between Dangote Sugar Refinery Plc and Savannah Sugar Company Limited (SSCL).
Dangote Sugar refinery Plc (DSR) a major subsidiary of the Dangote Group, has disclosed that it has listed 146,878,241 additional ordinary shares on the Nigerian Stock Exchange (NSE), as a result of the recent merger with Savannah Sugar Company Limited.
This disclosure signed by Head, Listings Regulation Department, Godstime Iwenekhai, was released during trading hours on Wednesday.
In line with the resolution passed at the Court-Ordered meeting of members of Dangote Sugar Refinery Plc on the 9th of July 2020, the additional shares listed on the Exchange arose from the Scheme of Merger between Dangote Sugar Refinery Plc and Savannah Sugar Company Limited (SSCL).
The additional 146,878,241 ordinary shares of 50 kobo listed are in consideration for the transfer by SSCL of all its assets, liabilities and business undertakings, including real property and intellectual property rights to DSR.
Hence, these shares shall be issued and allotted to the shareholders of SSCL (The Scheme Shareholders), in place of 162,756,968 ordinary shares held by the Scheme Shareholders in SSCL as at close of business on the terminal Date, when Dangote Sugar merged with Savannah Sugar Company Limited.
With the listing of the additional 146,878,241 ordinary shares, the total issued and fully paid-up shares of Dangote Sugar Refinery Plc has now increased from 12,000,000,000 to 12,146,878,241 ordinary shares of 50 kobo each.
Financial performance of Dangote Sugar Refinery Plc
Results for the first half of 2020 ended June 30, 2020, show revenue increased from N80.363 billion in the corresponding period of 2019 to N103 billion, as the company continue to benefit from border closure.
However, the profit of the company in H1 2020 was marginally higher than the profit in the corresponding period of 2019, as a result of higher raw material and consumables costs which rose faster than the increase in revenue.
Dangote Cement to extend clinker export to other African countries
Dangote is on course to sell more clinker across West Africa and commence shipment to Central Africa in H2 2020.
The Management of Africa’s largest cement producer, Dangote Cement Plc (DCP), disclosed during a virtual event yesterday, that the cement producer is set to commence clinker export to other African countries within the next few weeks.
The Acting Group CFO, Guillaume Moyen, made this known in his presentation at the joint virtual event with NSE, tagged “Facts Behind the Figures and Sustainability report’’ on Wednesday, 24th September, 2020.
Backstory: In its half-year report, the Management of Dangote disclosed that on 12 June 2020, the maiden shipment of 27.8Kt of clinker from Nigeria to Senegal left the Apapa Export Terminal.
The Management reiterated that the company is on course to sell more clinker across West Africa, and commence shipment to Central Africa in H2 2020. As it is in line with the Group’s vision of making West and Central Africa, cement and clinker independent, with Nigeria the main export hub.
The absence of limestone in much of West Africa, especially those in the coastal states, forces those countries to import bulk cement and clinker from Asia and Europe, and this is quite expensive.
However, Dangote Cement plans an ‘export–to–import’ strategy, positioning Nigeria as the main export hub of the continent, in a bid to serve West and Central Africa countries from Nigerian factories, making the region cement and clinker independent.
This is consistent with the Group’s vision of cementing Africa’s economic independence, as this would lead to lower clinker cost for pan-African operations, due to the proximity of Nigeria to these countries, as clinker landing cost will be cheaper.
The Management emphasized that this is possible, as Nigeria can serve a potential market of 15 countries, with over 350 million people, given the county’s relative abundance of quality limestone, especially in key Southern regions.
It is important to note that DCP’s clinker volume, according to figures contained in its H1 2020 results, has increased to 60Kt from 12kt in H1 2019, which translates to 400% increase.
The benefits of DCP’s export strategy
It is noteworthy that the innovative strategy of Dangote Cement Plc is expected to;
- Cement Africa’s economic independence, and contribute to the improvement of continental, regional, and intra-regional trade, as the company seeks to make regional and continental free trade agreement a reality.
- Ensure that the increase in production due to exports, leads to increase in capacity utilization in the Nigerian operation, and in turn, reduces fixed cost per tonnes.
- Increase foreign revenue exchange for the Nigerian operation, and offset foreign exchange risks.
- Reduce clinker landing cost, by leveraging on the proximity of Nigeria to other African countries.
Some of the benefits of our export strategy are Higher capacity utilization of our facilities; Ecowas benefits; Foreign exchange; and Lower clinker cost for Pan-Africa operations – @guillaumemoyen
#NSEhostsDangote https://t.co/TGd2N6JGZw pic.twitter.com/TvPGHunsb0
— The Nigerian Stock Exchange (@nsenigeria) September 23, 2020
Fidelity Bank to raise N50 billion in bonds in Q4 to refinance existing debts
The new issue will be made to redeem the existing N30 billion bond which was issued at 16.48%.
One of Nigeria’s second-tier commercial banks, Fidelity Bank Plc, has concluded plans to issue up to N50 billion ($131.3 million) in local bonds by the fourth quarter of 2020, in order to refinance existing debts as the yields drop.
The disclosure was made by the Chief Operations and Information Officer, Gbolahan Joshua, during an analyst call on Tuesday, September 8, 2020.
The crash of crude oil price globally, which was triggered by the novel coronavirus pandemic, has led to a decline in bond yields on the local debt market. This has made foreign investors to dump their local assets, leaving excess liquidity in the money market. This has also put a lot of pressure on the foreign exchange market as they look for dollars to repatriate their funds.
The Fidelity Bank top executive disclosed that the new issue will be made to redeem the existing N30 billion bond which was issued at 16.48%.
The global economic situation has seen yields in the debt market drop from as high as 18% about 3 years ago to less than 5% for the one-year treasury bill.
Fidelity Bank had revealed that it expected to see a 15% drop in profit this year when compared to 2019 result due to the coronavirus pandemic. Its profit after tax increased by 21.9% to N12 billion for the half-year 2020.
The second-tier bank also disclosed that its income declined in the second quarter due to a downward review of lending rates on loans as a result of the economic downturn.