Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have 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 this week.
Corporate Actions that took place this week
Tier one lenders, Access Bank Plc and UBA Plc, released their audited FY 2018 results.
Access Bank grossed N528 billion in earnings and made a profit after tax of N94.9 billion. The lender declared a final dividend of N0.25 per share, bringing total dividends for the 2018 financial year to N0.50.
UBA Plc recorded N464 billion as gross earnings and a profit after tax of N78.6 billion. The bank declared a final dividend of N0.65 per share, bringing total dividend for the 2018 financial year to N0.85 per share.
AIICO Insurance Plc held a board meeting on March 12, 2019. The company’s board approved its audited 2018 financial statements, as well as the payment of a dividend. The accounts have been forwarded to industry regulator, NAICOM, for approval and will thereafter be released to the NSE.
Unilever Nigeria Plc also held a board meeting on the 14th of March, 2019. The audited FY 2018 results were approved, as well as a dividend subject to shareholders’ approval. The company will forward its results on or before the 29th of March, 2019.
FBN Holdings held a board meeting on March 11, 2019 to consider the 2018 audited financial statements.
A new MD
NCR Nigeria Plc has announced the appointment of Christiana Yisa as Country Manager/Chief Executive Officer effective March 12, 2019. Her appointment comes on the heels of the resignation of Harold Anumihe. Yisa has over 16 years experience in Leadership, Sales and Marketing and Business Development. Prior to her joining NCR, Yisa was the IBM Commercial Sector Leader for Central, East and West Africa (CEWA).
Bismarck Rewane retired from the board of FCMB Group Plc. The move comes having served the maximum tenure allowed by regulation.
One more stop
Access and Diamond also sent a notice to the NSE, stating that they had obtained final approval from the Securities and Exchange Commission and CBN for their merger. The next and final step would be the court sanctioned approval.
The banks began the merger process with a formal announcement in December last year, after a few weeks of speculation.
FTN Cocoa Processors Plc attributed its inability to hold a backlog of annual general meetings, to the hard times it is facing.
Transmar Commodity USA (one of the firm’s foreign partners) had financial problems and went bankrupt. Staff are also being owed salaries, and many had resigned. Management is however hopeful its search for new investors would yield benefits.
Corporate Actions taking place next week
Zenith Bank Plc
Zenith Bank will be having its Annual General Meeting on Monday March 18, 2019.
Results in the pipeline
11 Plc (formerly known as Mobil Oil Nigeria Plc) will be releasing its full year 2018 results on Friday March 22, 2019. Cadbury Nigeria Plc will be releasing its audited 2018 results on March 20, 2019.
CAP Plc will be having a board meeting on Wednesday March 20, 2019 to consider its audited financial statements and other agenda items.
Julius Berger Nigeria Plc will hold a board meeting on March 19, 2019 and March 20, 2019 to consider the company’s audited full year 2018 results.
STACO Insurance Plc will hold a board meeting on Wednesday 20th of March, 2019, to consider a share reconstruction and capital raise.
Berger Paints Plc will be holding a board meeting on March 19, 2019 to consider the company’s 2018 audited results. A dividend proposal may also be considered.
Exchange rate falls across forex markets as dollar liquidity remains low
The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday.
Nigeria’s exchange rate at the NAFEX window depreciated to N389 during intraday trading on Tuesday, August 4, 2020. In a similar situation, the exchange rate at the parallel market depreciated marginally on Tuesday as well to close at N474/$1 and as high as N480/$1.
Parallel Market: At the black market where forex is traded unofficially, the Naira depreciated against the dollar to close at N474/$1 on Tuesday, according to information from Abokifx, a prominent FX tracking website. This represents a N1 drop when compared to the N473/$1 that it exchanged on Monday, August 3. However, Nairametrics forex tracker obtained a price of N480/$1 from some traders who we also source information from.
NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N389/$1. This represents a N1 drop when compared to the N388 rate close that was reported on the last trading day, Monday, August 3. The opening indicative rate was N388.46 to a dollar on Tuesday. This represents a 13 kobo drop when compared to the N388.33 to a dollar that was recorded on Monday.
The Naira fell to as high as N392.50 during intraday trading before strengthening to the closed rate of N389. It also sold for as low as N380/$1 during intraday trading. Forex is sold at several prices and different times during the day.
Forex Turnover: Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded an increase on Tuesday, August 4, 2020, as it rose by 43.12% day on day. According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $17.23 million on Monday, August 3, 2020, to $24.66 million on Tuesday, August 4, 2020. Despite the increase, the volume is a far cry from the average of over $200 million that was recorded in January 2020.
The average forex sale for last week was a low volume of about $32 million which is slightly better than the $27 million that was recorded the previous week. FX turnover which was not impressive last week has not shown any sign of recovery despite the picking up of business activities after the 2-day Sallah holiday.
READ ALSO: CBN adjust naira from N360 to N380 at SMIS
Total forex trading at the NAFEX window in the month of July was $937 million compared to $875 million in June.
The exchange rate disparity between the official NAFEX rate and the black-market rate remained wide on Monday staying as wide as N85. Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window).
Exchange rate unification remains on the cards and yet to be implemented weeks after the central bank governor confirmed it will be executed.
Nigeria’s airspace remains closed to commercial international flight operations and won’t be open till October 2020. Foreign travel has often been a source of demand for the greenback.
- The recent demand for dollars at the parallel market is thought to be fueled by speculators.
- The parallel market also caters to forex trades through wire transfers especially for buyers who cannot fulfil their dollar demands at the I&E window or the SMIS window.
- The exchange rate for wired transfer is often at a premium to the black market rate.
Forex Challenges: Last few weeks have been most challenging for the foreign exchange market as it witnessed very low liquidity. The downward slide against the greenback and some other major currencies continued this week due to tightened liquidity in the system.
According to a report from FSDH research, forex inflows into the I&E window had dropped significantly in the second quarter of 2020 on the back of lower foreign portfolio inflows. Although there was a slight improvement in the month of July, the turnover of $937 million is a far cry from the $3.7 billion turnover that was recorded in the month of March before the lockdown which was triggered by the coronavirus pandemic.
The low oil prices have constrained the CBN’s capacity to intervene further in the foreign exchange market as dollar inflow still remains very low.
How to access CBN’s Health Research & Development grant
The Scheme shall be funded from the Developmental Component of MSMEDF.
The Central Bank of Nigeria has issued the guideline for accessing the Healthcare Sector Research and Development Intervention Scheme (HSRDIS) grant.
The grant, which is part of the apex bank’s policy response to the COVID-19 pandemic, is designed to help strengthen the public healthcare system with innovative financing of research and development (R&D) in new and improved drugs, vaccines, and diagnostics of infectious diseases in Nigeria.
The guideline was published on the CBN’s website on Tuesday.
Why it matters: HSRDIS is designed to trigger intense national R&D activities to develop a Nigerian vaccine, drugs and herbal medicines against the spread of COVID-19 and any other communicable or non-communicable diseases. This would be done through the provision of grants to biotechnological and pharmaceutical companies, institutions, researchers, and research institutes.
Who is eligible: Activities eligible for consideration under the Scheme shall include:
- Research and development of candidate drugs, herbal medicines, and vaccines validated by relevant health authorities for the control, prevention and treatment of infectious diseases.
- Manufacturing of drugs, herbal medicines and vaccines validated by relevant health authorities for the control, prevention and treatment of infectious diseases.
- Red biotechnological R&D in new health technology for the control, prevention and treatment of infectious diseases.
- The research partnership between academia and industry into the development of drugs and vaccines for the control, prevention and treatment of infectious diseases.
- Research and development into validated phytomedicines for the control, prevention and treatment of infectious diseases.
Important Notice: Candidate vaccines undergoing pre-clinical testing or trials shall not be eligible for consideration under this Scheme. However, candidate vaccines 4 Classified as Confidential undergoing clinical testing or trials shall be eligible for consideration under the Scheme if considered to have high potential to cross the clinical trial stage and prospects of scale by the Body of Experts (BoE).
Who funds the grant: The Scheme shall be funded from the Developmental Component of the Micro, Small and Medium Enterprise Development Fund (MSMEDF).
- Research activities: Maximum of N50.0 million.
- Development/Manufacturing activities: Maximum of N500.0 million.
NOTE: Disbursement under the Scheme shall be made to beneficiaries in tranches, subject to approved milestones achieved.
Research and Development Timeframe
- research activities: Not more than two (2) years from the date of release of fund.
- Development/Manufacturing activities: Not more than one (1) year from the date of release of fund.
Read the full guidelines here.
Nigerian firms expect to start employing again in August – CBN survey
Wholesale/retail trade had the highest prospect for employment in August.
After a trying five months of the Coronavirus pandemic and the consequent challenges for the economy, business enterprises in Nigeria expect to start employing again in the month of August 2020.
This is according to the CBN Business Expectation Survey which was published recently on the CBN website.
Findings from the survey show a generally optimistic outlook for August with a confidence index of 33.7 points, and hopes that the volume of business activities would increase in the next 2 to 6 months to justify the employment outlook.
The business survey was conducted by the statistics department of the Central Bank of Nigeria in July 2020, and it involved a sample of 1050 businesses with a 96% response rate. Respondent firms include small, medium and large businesses cut across agriculture, services, manufacturing, wholesale/retail trade, and construction sectors, both import and export-oriented, across the country.
Sector by sector breakdown showed that wholesale/retail trade had the highest prospect for employment in August with an index of 16.4 points, while manufacturing trailed closely behind with 14.6 points. Respondent firms in Agric/services put the employment prospect index at 3.1 points.
The wholesale/retail trade sector is also highly optimistic on expansion plans, showing an index of 46.3 points, while the construction sector had an index of 45.0 points. Agric/services sector had an index of 43.4 and manufacturing sector had 39.7 points all pointing towards a positive disposition to expand in the current month (August).
With such expansion plans in view, borrowing rate is also expected to increase in August, September, and December 2020 with confidence indices of 10.5, 15.7 and 16.1 points respectively.
This is in spite of the obvious challenges which the firms face, which include insufficient power supply, competition, unfavourable economic climate, financial problems, and high-interest rates.
Unclear economic laws, unfavourable political climate, insufficient demand, difficulties in accessing credit and equipment also pose major constraints to business activities.
More on the outlooks
On the exchange rate, firms are positive that the Naira will appreciate in August, September, and December, with 3.0, 16.5 and 49.4 confidence index points respectively. Meanwhile, inflation level is expected to rise in the next 6 to 12 months (December 2020 and June 2021), at 13.92 and 13.95 percent.
There is an anticipated increase in economic conditions in August at 22.8 points, much higher than the 9.5 points in July. The firms also expect things to improve more in September and December with confidence of 31.7 and 51.4 points.