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Markets

CORPORATE ACTIONS: BILLIONS ON THE TABLE AND A U TURN

FBN Holdings and Capital Hotels Plc will be holding their Annual General Meetings next week, among other corporate actions on the @nsecontact next week.

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Corporate Actions

Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have impacts on the firms themselves or shareholders.  

Examples of corporate actions include the release of quarterly and full year results,  payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates. 

Here is a rundown of corporate actions  that took place last week, and those expected to take place this week.  

N130 billion on the table  

In perhaps the biggest news that broke on the Nigerian Stock Exchange last week, the board of Dangote Flour Mills Plc announced that it had received a buyout offer to the tune of N130 billion from Olam International. The offer is however subject to both regulatory and shareholders’ approvals. The board has since accepted the offer, and will tender it before shareholders.  

The news led to a 45.3% surge in the company’s share price, and the stock topping the gainers chart for last week.  

A new listing 

Skyway Aviation Handling Company (SAHCO ) Plc listed its entire paid up share capital of 1.35 billion shares on the Nigerian Stock Exchange.

The shares were listed at N4.65 per share.

Slow downs  

Dangote Cement released its Q1 2019 results after trading hours on Friday and there was a dip in both top and bottom lines. Gross profit was down 2.8% to N140 billion. 

Profit after tax, is down 16.5%. 

NASCON Allied Industries’ Q1 2019 results show flat revenue and a sharp decline in profit.  

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Revenue was flat at N6.8 billion for Q1 2019. Profit before tax declined by 33% to N1 billion. Profit after tax dropped 34.6% to N694 million in 2019.  

Construction giant, Julius Berger’s, Q1 2019 results show that revenue was up, but an increase in cost of sales and administrative expenses led to a sharp drop in bottom-line. 

Revenue was up 78.1% to N62.9 billion in 2019. Profit before tax however dropped by 45.4% to N1.2 billion. Profit after tax fell by 67.4% to N485 million. 

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Beer struggles 

Brewing giantsGuinness Nigeria Plc and Nigerian Breweries Plc, both released their 9M 2018/2019 and Q1 2019 results respectively. The performanceof both firms were poor.  

Guinness Nigeria had a decline in bottom line in 9M 2018/2019. Gross earnings fell minutely to N101 billion. Profit before tax fell 20.5% to N6.2 billion. Profit after tax also declined by 16% to N4.2 billion.  

Nigerian Breweries had a marginal increase in revenue, but significant decline in profit before tax and profit after tax. Revenue was up by 3.2% to N91.3 billion in Q1 2019. Profit before tax however dropped by 25% to N11.4 billion. Profit after tax also fell by 22% to N8 billion.  

A surprise from Cadbury  

Cadbury Nigeria has carried over its impressive FY 2018 performance into 2019 going by its Q1 2019 results. While revenue rose marginally, profit before and after tax jumped significantly.   

Revenue went up by 13% to N9.2 billion in Q1 2019. Profit before tax jumped 2201% to N723 million. Profit after tax also rose by the same margin to N506 million.  

Vitfoam keeps going  

Vitafoam seems poised to maintain the decent performance attained in its last financial year. H1 2018/2019 results show an increase in both revenue and profit.  Revenue is up 20.5% to N12.9 billion. Profit before tax rose sharply by 136% to N1.1 billion. Profit after tax also increased by 150% to N774 million in 2019.  

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 A quiet NEM  

NEM Insurance released its full year 2018 results with little or no buzz in terms of trading volumes.  

Gross premium written increased by 13% to N15 billion in FY 2018.  Profit before tax dropped by 13% to N2.6 billion. Profit after tax declined by 25.9% to N2 billion.  

The company declared a final dividend of N0.13, up by 30% from the N0.10 paid in the 2017 financial year.  

Less oil at Okomu  

Okomu Oil palm’s Q1 2019 numbers show a sharp decline in both topline and bottom line. Turnover fell by 42.4% to N4.2 billion in 2019. Profit before tax declined by 69.2% to N1.2 billion in 2019. Profit after tax also fell by 70.5% to N1 billion in 2019.  

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Mixed tales in banking  

UBA had an increase in gross earnings and bottom line for Q1 2019. Gross earnings went up 16.3% to N40.6 billion in 2019. Profit before tax was up 13.5% to N30.1 billion. Profit after tax was up 20.6% to N28.6 billion. 

FBN Holdings, had a marginal increase in profit for the first quarter ended March 2019. Profit before tax rose by 2.6% to N19.3 billion in Q1 2019. Profit after tax rose by 6.8% to N15.7 billion in Q1 2019.  

Tier two lenders, Fidelity Bank Plc and Wema Bank Plc, had sharp rises in profit in their Q1 2019 numbers.  

Fidelity Bank’s Q1 2019 saw increase in both top and bottom lines. Gross earnings was up 11.7% to N48.4 billion. Profit before tax rose by 34.6% to N6.6 billion. Profit after tax rose by 28.2% to N5.9 billon. 

Wema Bank’s profit before tax was up by 50.7% to N1.3 billion.  Profit after tax also rose by 49.7% to N1.1 billion.  

Stanbic IBTC’s Q1 2019 gross earnings rose modestly, while profit before and after tax  and PAT dipped sharply. 

Gross earnings increased by 2.2%. Profit before tax dropped by 11.6% to N23.5 billion in 2019. Profit after tax declined by 16.9% to N19.1 billion in 2019. 

A U TURN 

Regency Alliance Insurance Plc’s board approved the firm’s Q1 2019 results, but decided to to leave the company’s corporate structure unchanged.

AGMs that held

UBA, Fidelity Bank, FCMB, Custodian Investment and Sterling Bank all held their Annual General Meetings last week.

Corporate Actions taking place next week 

Seplat Petroleum will release its Q1 2019 financial results on the 30th of April.  

Board meetings 

Nestle Nigeria Plc will hold a board meeting to consider its Q1 2019 results on the 30th of April, 2019.  

MRS Oil Plc will also be holding a board meeting on the 30th of April, 2019 to consider the company’s Q1 2019 results.  

AGMs   

Capital Hotels Plc will be having its Annual General Meeting on Thursday the 2nd of May 2019, hence a place on this week’s watchlist 

FBN Holdings Plc will be holdings its Annual General Meeting on the 3rd of May 2019.  

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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Stock Market

Oba Otudeko gains N690 million in a single session on NSE

The market value of Otudeko’s 5.3 billion units stake in Honeywell surged by 10% in a day.

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Billionaire watch: Oba Otudeko’s stakes in Firstbank and Honeywell are worth N10.3 billion

The founder and chairman of the Honeywell Group, Oba Otudeko gained a whopping N690 million from his Honeywell Flour Mills Plc stake in a single session on the Nigerian Stock Exchange, as local investors bid up the shares of his flour milling company.

Otudeko who is also well known for his investment in the oceanfront Radisson Blu in Lagos, is the single majority shareholder of Honeywell Flour Mills, considering his ownership stake in the company which runs to about 5.29 billion units, out of the 7.93 billion total issued shares of the company.

Otudeko’s stake in Honeywell Flour Mills has a valuation of about N7.58 billion

His 75% ownership stake in Honeywell Flour Mills of about 5.29 billion issued shares of the company which he holds indirectly through Siloam Global Services Limited, is presently worth about N7.57 billion, up from a N6.88 billion valuation at market open yesterday 20th of April 2021.

The recent gains in Otudeko stake were driven by buying pressure in the shares of his company as the move saw the shares of Honeywell surge by 10% in a single session, from N1.30 at the open of the market on the 20th of April, to N1.43 at the close of the market.

This bullish move in the shares of the miller pushed its market capitalization up by about N1.03 billion on the exchange yesterday, from N10.31 billion as of Monday, 19th April to N11.34 billion at the close of the market.

What you should know

At the close of trading activities yesterday on the exchange, the market capitalization of all the issued shares of Honeywell flour mills Plc was put at N11.34 billion.

The shares of the flour miller cleared at N1.43 per share. This is 10% higher than Monday’s N1.30 closing price, with about 8,935,946 ordinary shares of the company exchanged in 150 executed deals on the Exchange yesterday, worth about N12.56 million.

Honeywell’s shares are currently trading at 62.5% higher than its 52-week low of N0.88 per share, and 8.33% lower than its 52-week high.

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The prevailing market price presents bargain hunters who bought shares of the company low with the opportunity to book some profits.

Market performance

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  • The Nigerian Stock Exchange All-Share Index and Market Capitalization appreciated by 0.43% to close higher at 39,015.58 index points and N20.418 trillion respectively, at the end of trading activities yesterday.
  • The NSE Consumer Goods Index, an investable benchmark designed to track the performance of consumer goods companies like Honeywell Flour Mills, appreciated by 0.38% to close the day higher at 555.22 index points.

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Cryptocurrency

Nigerians increasingly using Bitcoin since CBN’s Crypto ban

A growing number of Nigerians are not giving up on the crypto that has outperformed any Nigerian-based financial asset.

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Nobody is going to ban Bitcoin - US Bank regulator

It’s been roughly three months since the Central bank restricted Nigeria’s financial institutions from dealing with anything crypto-related, yet recent data suggests its citizens have increasingly found other alternatives to access the world’s flagship crypto.

Data retrieved from Usefultulips (a Bitcoin analytic data provider) shows that the usage of Bitcoin’s peer to peer trading in Nigeria surged by 27% since the CBN directive took effect about 85 days ago, as Nigerians moved about $103 million worth of Bitcoins on just Paxful and LocalBitcoins channels alone.

Bitcoin recorded gains and its suitability in hedging against inflation, coupled with access to other crypto assets that offer more viable options, seem not to have weakened despite the recent N5/$ rebate scheme introduced by the Central Bank of Nigeria to encourage Nigerians in the diaspora to use official channels to remit their funds instead of doing so through Cryptocurrencies.

The world’s most popular crypto has rallied by almost 500% since its latest bull run began at the start of Q4 2020, hitting record highs of almost $65,000 this month before pulling back to $55,000 at the time of drafting this report amid strong institutional purchases sighted in emerged markets.

Some market analysts argue that Nigeria’s apex bank’s hold on the country’s financial system has further complicated transactional processes in Africa’s largest economy because Bitcoin still relies heavily on fiat currencies despite being virtual, from pricing its value to how its ownership is being ascertained. In spite of this, the growing interest in Bitcoin has not weakened.

Adding credence to Nigeria’s grip on Bitcoin includes data collated from Google trends, printing that Africa’s largest crypto market, emerged as the first amongst other countries by a long-distance over its interest in Bitcoin with a perfect score of 100%.

Nigeria’s relatively young educated population coupled with its growing internet adoption and smartphone penetration has facilitated Bitcoin to thrive exponentially amid rising inflation that has eroded the savings of many Nigerians.

The borderless feature of Bitcoin also makes payment effortless for Nigerians in addition to offering outrageously low transaction fees.

To give context, many Nigerian banks charge 1–2.5%. For a $1 million offshore transfer, bank charges may go up to $10,000, but with the flagship crypto, transfer of such amount would not exceed $300, even at peak periods.

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Consequently, a significant number of Nigerians already pay a premium for accessing the crypto market, as data from Binance, the world’s largest crypto exchange by volume, at the time of writing, posted a rate of N607 to 1 USDT with Nigerian banking channels close to the global crypto ecosystem.

Bottom line

A growing number of Nigerians are not giving up on the crypto that has outperformed any Nigerian-based financial asset. They are thus ready to pay a premium to hold on to Crypto irrespective of the Central Bank’s ban.

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