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CORPORATE ACTIONS: An Exit and a Yhello landing

@MTNNG listing on the @nsecontact premium board was the highlight of activities on the Nigerian bourse last 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, payments of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.

Corporate actions that took place last week

A Yhello landing: In perhaps the biggest event so far this year on the exchange, MTN Nigeria was listed on the Premium Board of the Nigerian Stock Exchange, last week. 20.3 billion shares valued at N90 per share, were listed.

The company has gained 20% since listing, amidst massive demand.

MTN Nigeria also announced that it had obtained a N200 billion loan from a consortium of local banks. The loan is denominated in naira, and with a two year moratorium.

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International Breweries announced the appointment of Olutoyin Odulate as an Independent Non Executive Director. Odulate is the Founder and CEO of Olori Beauty Enterprise Limited.

Medview Airlines, in a notice sent in last week, announced that it was one of three carriers chosen by the Federal Government for Hajj operations.

CEO of the firm, Munir Bankole also disclosed that some of the airline’s aircraft would be back from scheduled maintenance soon.

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Greif Nigeria Plc (formerly known as Van Leer) announced a delay in the release of its Q2 2019 results. Apparently, a few of the company’s key staff had jumped ship, since the company announced a suspension of operations.

The firm however expects to file its results on or before the 14th of June 2019.

No laws broken: Chams Group sent in a notice clarifying issues around the payment of a  three kobo dividend. The dividend in question was paid from Chams Plc’s retained earnings of N385 million. Chams Group however has negative retained earnings of N1.5 billion.

The company also defended its action, relying on Section 380 A of the Corporate and Allied Matters Act (CAMA). In essence, a company can pay dividends from revenue reserves, realised profit on a fixed asset sold or profits arising from the use of the company’s property.

An Exit: On Monday last week, Newrest ASL shares were delisted from the Nigerian Stock Exchange.

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Going Going: First Aluminum Plc shares were placed on suspension last week in preparation of its voluntary delisting.

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Markdowns: Nestle Nigeria Plc, Regency Alliance Insurance, Eterna Plc and Okomu Oil Nigeria Plc were marked down last week.

Corporate Actions taking place next week

AIICO Insurance will be holding its Annual General Meeting (AGM) on Monday, the 20th of May, 2019.

Caverton Offshore Support Group and Consolidated Hallmark Insurance Plc will hold their AGMs on the 21st of May, 2019.

NCR Nigeria Plc will hold its AGM on the 22nd of May, while Pharmadeko, GSK Consumer Nigeria and Berger Paints Plc will hold their AGMs on the 23rd of May, 2019.

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

Mutual Benefits Assurance Plc to raise N4.8 billion through private placement

Mutual Benefits Assurance Plc. has secured permission to raise the sum of N4.8 billion through private placement.

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Mutual Benefits Assurance announces CEO's exit, replacement

The Board of Directors of Mutual Benefits Assurance Plc. has secured permission to raise the sum of N4.8 billion through private placement.

This is according to a disclosure signed by the company’s Secretary, Jide Ibitayo and seen by Nairametrics.

The disclosure is part of the resolutions reached at the Extra-Ordinary General Meeting of the firm and sent to the Nigerian Stock Exchange, dated December 3, 2020.

According to the information contained in the notification, the private placement worth N4.8 billion is to be raised through the sale of 8,888,888,889 ordinary shares of 50 kobo each of the company, at the rate of 54 kobo per share, in a distribution succinctly captured below:

  • 5,331,004,445 units (approximately 60% of the total allotted units) is to be sold to Charles Enterprises LLC for about N2.88 billion.
  • The remaining 3,557,844,444 (approximately 40% of the total allotted units) is to be sold to Arubiewe Farms Ltd for about N1.92 billion.

What this means

  • According to Investopedia, a private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market. It is an alternative to an initial public offering (IPO) for a company seeking to raise capital for expansion.
  • In this light, it is pertinent to note that private sales are now common for start-ups, as they allow the company to obtain the money they need to grow while delaying or foregoing an IPO.

What you should know

Other key resolutions reached at the Extra-Ordinary General Meeting include:

GTBank 728 x 90
  • Raising the company’s authorized share capital from N10 billion to N10.05 billion.
  • To raise additional capital via the issue of debt or equity or a combination of both including convertible bonds, loans, stock, bonds with options etc.
  • Amendment of clause 6 of the Memorandum and clause 5 of the Articles of Association of the company respectively.

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Currencies

CBN latest policy on diaspora remittance kicks off tomorrow

CBN’s latest policy on receipt and administration of diaspora remittances into Nigeria is set to kick off tomorrow.

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parallel market, Covid-19: N3.5 trillion disbursed as stimulus package for the Nigerian economy, CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited, Key highlights of the October 2020 Business Expectations Survey Report, A Total of N3.5 trillion was disbursed in the wake of the COVID-19 pandemic, in addition to several other interventions to reflate the economy - CBN, BOFIA 2020: Steps forward or backwards for Nigerian banks, Total credit to the economy rose to N19.54trillion – CBN Governor

The Central Bank of Nigeria has announced that its recent policy on receipt and administration of diaspora remittances into Nigeria is set to kick off tomorrow, December 4, 2020.

This is according to a press release issued by the apex bank today.

The announcement became imperative after consultations and engagements with relevant stakeholders over smooth implementation of the recent policy, which is aimed at providing a more convenient channel for Nigerians in Diaspora to remit funds back to Nigeria.

What they are saying

Commenting on the recent development, the Governor of Central Bank of Nigeria, Godwin Emefiele said:

“In the course of following up on the implementation of the aforementioned new policies, the CBN observed some pushback by some of the IMTOs, which were bent on undermining the new policies. This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all DMBs must close all Naira General Ledgers through which the Naira remittances were being carried out.

GTBank 728 x 90

“Following the announcement of these new policy measures, the Central Bank of Nigeria, in an effort to enable smooth implementation, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice.

“As a result of these engagements, which took place with major IMTOs and the DMBs today, Thursday, December 3, 2020, the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.

“I therefore seize this opportunity to announce to Nigerians both at home and in the diaspora, that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, MoneyGram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020.”

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What you should know

The recent policy as earlier reported by Nairametrics, requires banks to transfer all diaspora remittances to the domiciliary accounts of the beneficiaries or pay the customers in foreign currency.

  • This is in contrast to the previous policy, where inflow through IMTOs such as Western Union was paid to beneficiaries in Naira.
  • In lieu of this, the Central Bank of Nigeria had instructed DMBs to close all Naira ledger accounts opened specifically for the purpose of receiving IMTO (foreign transfers from diaspora Nigerians) with immediate effect.

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Stock Market

UBA, GTBank, Zenith Bank tumble, Bears take a grip on Nigerian Stocks

The market breadth index was negative with 25 losers against 13 gainers.

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Nigerian bourse closed negative on Thursday. The All Share index declined further by -0.25% to close at 34,968.94 from 35,056.82 points.

  • Year-to-date and market capitalization similarly dropped by -0.25% to settle at 30.40% and N18.27 trillion respectively.
  • A total volume of 289.3 million units of shares, valued at N7.34billion exchanged hands in 4,878 deals. UBA was the most traded shares by volume at 34.4 million units, while MTNN topped by value at N4.37billion.
  • The market breadth index was negative with 25 losers against 13 gainers. CADBURY (-5.43%) led the laggards today, while ARDOVA (+7.69%) was the top gainer.
  • The sectorial performance was mixed as the Banking, Insurance, and Consumer Goods indexes dipped -2.07%, -0.82%, and -0.20%, while the Oil & Gas gained +0.35%. The Industrial sector closed flat.

Top Gainers

  1. MTNN up 0.77% to close at N156.2
  2. ARDOVA up 7.69% to close at N14
  3. REDSTAREX up 4.00% to close at N3.38
  4. CUTIX up 5.56% to close at N1.9
  5. UPL up 4.26% to close at N1.47

Top Losers

  1. CADBURY down 5.43% to close at N8.7
  2. UBA down 5.20% to close at N8.2
  3. ZENITHBANK down 1.88% to close at N23.55
  4. FLOURMILL down 1.85% to close at N26.5
  5. GUARANTY down 1.47% to close at N33.6

Outlook

Nigerian stocks drifted lower at the fourth trading session of the week, as significant sell-offs seen in Nigerian tier -1 banks added pressure on the Nigerian All-Share Index.

  • Stock experts anticipate more consolidation now as investors become more choosy on stocks to buy taking into consideration that experts don’t see any new highs now till next year.
  • That said, Nairametrics envisages cautious buying on the bias that stock traders are expected to be a bit cautious amid recent macros prevailing at the Nigerian currency market.

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