Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have an impact on the firms themselves or shareholders.
Examples of corporate actions include the payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.
Here is a review of corporate actions that took place last week and those expected to take place this week.
Skye Bank suspended
The Nigerian Stock Exchange (NSE) yesterday placed the shares of Skye Bank Plc on technical suspension, effective Monday, September 24, 2018.
This follows the revocation of the bank’s licence by the Central Bank of Nigeria (CBN). Shareholders of the company may have lost their investments, following the CBN’s action.
Waiting for the referee
Resort Savings and Loans released an update concerning a planned capital injection by the private equity firm, Milost Global. According to the bank, a technical suspension placed on its shares had prevented a market value on the company’s shares from being determined. Milost intends injecting $1 million as soon as possible.
The company has since released some of its long overdue results.
Board changes at Guinness Nigeria
Guinness Nigeria Plc appointed Mrs Yemisi Ayeni as a Non-Executive board member. Ayeni is the current chairman of NASCON Allied Industries Plc and had worked in Shell for over 20 years, before her retirement in 2015. Professor Joe Irukwu retired from the board.
Honeywell Flour to open new factory in October
Honeywell Flour Mills last week held its Annual General Meeting. Chairman of the company, Oba Otudeko, disclosed that the company would open its new factory in October.
Annual General Meetings Held
Premier Paints Plc and Aluminium Extrusion Plc held their Annual General Meetings on the 20th and 21st of September respectively. The companies are yet to issue an update on resolutions agreed.
An Eneli in EKO
Eko Corp Plc announced the appointment of Uzochukwu Eneli to its board. He replaces Senator Mike Ajegbo, who had represented the estate of the late Dr Alex Eneli (a co-founder of the hospital).
UBA Plc and Access Bank Plc paid 2018 interim dividends on the 20th and 21st of September, 2018. UBA paid an interim dividend of N0.20 per share, while Access paid an interim dividend of N0.25.
Union Homes Real Estate Investment Trust ( REIT) paid a dividend of N0.75 on the 21st of September, 2018.
RT Briscoe Plc
RT Briscoe has announced the appointment of Olorunfemi Eguaikhide and Jubril Adetokunbo Shittu as Chief Operating Officer and Acting Chief Financial Officer respectively.
LASACO Assurance Plc
LASACO Assurance Plc notified the Nigerian Stock Exchange of an Extraordinary General Meeting billed to take place on the 10th of October, 2018. Agenda is to obtain shareholders approval to raise capital.
Berger Paints Plc
Berger Paints Plc has appointed Ayotunde Ayoko as Company Secretary/Legal Adviser. Prior to his appointment, Ayoko had served as company secretary to several subsidiaries under FBN Holdings. The company will also be holding a Facts Behind the Figures session this Monday at the Nigerian Stock Exchange (NSE).
Corporate Actions holding this week
First Aluminum Plc, Veritas Kapital Assurance Plc, and Fidson Healthcare Plc will be holding their Annual General Meetings on the 25th of September 2018.
Fidson will be paying a final dividend of N0.20 for the 2017 financial year, on the 26th of September 2018, if approved by shareholders.
Lafarge Africa Plc will be holding an Extraordinary General Meeting on the same day. Agenda is to obtain shareholders’ approval for a rights issue.
University Press Plc, Chellarams Plc, Sovereign Trust Insurance Plc, Cornerstone Insurance Plc, and Academy Press Plc will be holding their Annual General Meetings on September 27, 2018.
Guinness Nigeria Plc
Guinness Nigeria Plc will be closing its shareholders register from the 24th to the 28th of September. This is to enable the firm to compile details of shareholders to be paid dividends.
PZ Cussons Nigeria Plc
PZ Cussons Nigeria Plc will be closing its shareholders register from the 24th of September to the 4th of October 2018.
U.S stocks close lower, led by Apple, Boeing
Apple Inc, the most valuable listed company, plunged in value by 3.17% to close at $106.84.
U.S. stocks closed negative at the last trading session for the week, as heavy losses were recorded in the stock prices of Apple and Boeing, the world’s largest airplane maker.
At the close in NYSE, the Dow Jones Industrial Average declined by 0.88%, while the S&P 500 index declined by 1.12%, and the NASDAQ Composite index lost 1.07%.
The worst performers at the just concluded trading session include Boeing Co which dropped by 3.81% to close at $161.14. Apple Inc, the most valuable listed company, plunged in value by 3.17% to close at $106.84.
The number of U.S listed stocks that dropped outnumbered gainers at the New York Stock Exchange by 2023 to 1059, and 81 ended neutral. On the Nasdaq Stock Exchange, 1444 fell and 1433 advanced, while 59 ended neutral.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at AxiCorp, gave critical insights on the geopolitical indicators affecting U.S stocks.
“The US election risk, which is more about post-election uncertainty than the actual outcomes, is getting partially priced. There is virtually no expectation for stimulus, just as Trump is now pushing the Republicans to agree to a broader fiscal package (I am sure he is overseeing stocks).”
He also gave a detailed analysis of the present volatility noticed in the Tech stocks dominated Index, by saying:
“The Nasdaq, which plummeted 12% off its Sept. 2 record in just six days, has recouped some 3% of its loss, Nasdaq volatility has dropped and investors – retail and hedge funds – bought the dip.
“Still, they remain scarred, and while relative bargains are to be had, flows are not sponsoring those fire sales as last week’s warning shot on concentration is something investors are not taking lightly.
“The tech sector jolt continues to underscore a subtle change to investor behavior and one that could rear its ugly head again.”
FBN Holdings, GTBank, Access Bank most traded stocks W/W
The Nigerian bourse ended the week cumulatively on a less impressive note.
The Nigerian bourse closed the trading session cumulatively bearish W/W, with the All Share Index dropping by 0.08% W/W, while market capitalization presently stands at N13.365 trillion.
- A total turnover of 1.139 billion shares worth N12.692 billion in 17,109 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.226 billion shares valued at N10.842 billion that exchanged hands last week in 19,529 deals.
- The Financial Services industry (measured by volume) led the activity chart with 870.300 million shares valued at N7.863 billion traded in 9,427 deals; thus contributing 76.43% and 61.95% to the total equity turnover volume and value respectively.
- The Industrial Goods industry followed with 62.689 million shares worth N1.162 billion in 1,557 deals. In the third place was the ICT industry, with a turnover of 50.859 million shares worth N2.552 billion in 619 deals.
- Trading in the top three equities, namely FBN Holdings Plc, Guaranty Trust Bank Plc, and Access Bank Plc. (measured by volume) accounted for 353.048 million shares worth N4.018 billion in 3,095 deals, contributing 31.00% and 31.66% to the total equity turnover volume and value respectively.
- 32 equities appreciated at price during the week, higher than 23 equities in the previous week.
- 31 equities depreciated in price, lower than 38 equities in the previous week, while 100 equities remained unchanged, lower than 102 equities recorded in the previous week.
Top 10 gainers W/W
- WAPIC INSURANCE PLC up 12.12% to close at N0.37
- LEARN AFRICA PLC up 9.62% to close at N1.14
- UNITY BANK PLC up 9.62% to close at N0.57
- NEIMETH INTERNATIONAL PHARMACEUTICALS PLC up 9.55% to close at N1.95
- IKEJA HOTEL PLC up 9.52% to close at N0.92
- CAP PLC up 8.57% to close at N17.10
- BERGER PAINTS PLC up 7.44% to close at N6.50
- UNION BANK NIG.PLC up 7.00% to close at N5.35
- CONSOLIDATED HALLMARK INSURANCE PLC up 6.90% to close at N0.31
- PRESTIGE ASSURANCE PLC up 5.77% to close at N0.55
Explore the Nairametrics Research Website for Economic and Financial Data
Top 10 losers W/W
- ASSOCIATED BUS COMPANY PLC down 16.67% to close at N0.30
- NEM INSURANCE PLC down 9.78% to close at N2.03
- TRIPPLE GEE AND COMPANY PLC down 9.09% to close at N0.40
- UNIVERSITY PRESS PLC down 7.65% to close at N1.57
- UNION DIAGNOSTIC & CLINICAL SERVICES PLC down 7.41 to close at N0.25
- FCMB GROUP PLC down 6.36% to close at N2.06
- CORNERSTONE INSURANCE PLC down 6.15% to close at N0.61
- NIGERIAN AVIATION HANDLING COMPANY PLC down 6.10% to close at N2.00
- NPF MICROFINANCE BANK PLC down 5.80% to close at N1.30
- INTERNATIONAL BREWERIES PLC. down 5.71% to close at N3.30
The Nigerian bourse ended the week cumulatively on a less impressive note, amid Brent crude prices closing above $43/Barrel.
- It should be noted that prevailing macros, like the exponential growth in the COVID-19 caseloads across the world, dampened the resolve of foreign investors in taking a significant part in Nigeria’s stock market trading session, coupled with the prevalence of the dollar scarcity.
- Buying pressure from notable financial brands, which include Union Bank, Unity Bank WAPIC, got neutralized by sell-offs recorded in FCMB, NEM, and International Breweries.
- Nairmetrics envisages cautious buying, as market liquidity remains a growing concern among day traders.
Why Africans are fast using Bitcoin for payment transfers
In recent times, the use of Bitcoins for payment transfers has fast increased in the continent.
Africa has one of the fastest-growing crypto spaces in the world, with Africans sending about $8.0 billion worth of crypto, while receiving about $8.1 billion worth of crypto in 2019.
The increased usage by many young, educated Africans is a result of the economic instability and high bureaucratic processes by African banks for transfers. Bitcoin offers low-fee remittances and an alternative way to preserve and grow wealth.
Bitcoin is attracting many African millennials, as a report coming from the World Bank revealed that the global average cost of sending $200 remains as high as 6.8% in the first quarter of 2020, only slightly below the previous year. Sub-Saharan Africa continues to have the highest average cost at about 9 percent, yet intra-regional migrants in Sub-Saharan Africa comprises over two-thirds of all international migration from the region.
These high transactional costs have been countered with the usage of Bitcoin, where transaction cost can be as little as $5 to move over $10,000 worth of Bitcoins.
In an explanatory note, Adebayo Juwon, FTX Country Manager, spoke exclusively to Nairametrics on why Bitcoin is fast gaining traction among Africans. He said:
“Bitcoin serves as a store of value, speculative asset, and means of payment, among other things. Bitcoin is personally owned by holders, which no government has authority over. Africans are getting the idea of Bitcoin, and using it more for transactions across borders with no third party involved, no long processing period, and low fees.
“Using Bitcoin also gives direct exposure to USD, EUR, GBP etc. without stepping into the banking hall. This means bitcoin users in Africa can convert their crypto assets to a more stable currency. This makes local and international transfers seamless for bitcoin users from their mobile devices.”
Africans are using Bitcoin to avoid expensive and heavily bureaucratic money transfer systems currently available. Many of them now rely on remittances for their daily activities, so any way of making the process more effective and cheaper would be of great benefit to them, and this is where Bitcoin comes in.
Ray Youssef, CEO and founder of crypto-exchange Paxful, emphasized the role that Bitcoin remittances play for African users on Paxful. He said:
“Some of our users in Africa are even building their own remittance businesses on top of Paxful. One man I spoke to who lives in South Africa but is originally from Nigeria saw how hard it was to send money back home, and started a business where he would take cash from other Nigerian expatriates, convert it into Bitcoin, send it to someone in Nigeria via Paxful, and have that person convert it into naira and deliver it to the person’s family.’’
Youssef cited some examples of how some Paxful users skipped bank transfers. He stated:
“In one instance, a user ran a business importing video games from China to sell in Nigeria. His bank wouldn’t let him wire money to China, so historically he had to get U.S. dollars on the black market and somehow get it to China, usually via Hong Kong. But with cryptocurrency, he can sell bitcoin to receive CNY (Chinese Yen) in any major Chinese digital wallet and send it directly to his counterparty in China.”
Moreso, Africans use Bitcoin as preservation for wealth and to hedge against inflation. For instance, Nigeria having an inflation rate of 12.58% shows that the value of the naira depreciates by that much every year, thereby eroding the purchasing power of many Nigerians.