Financial Services
Cornerstone Insurance’s board will meet July 22nd to consider 2 important issues
Directors typically meet to consider/approve financial statements before they are released.
Cornerstone Insurance Plc’s board of directors will meet on July 22nd to deliberate on two important company issues.
A public notice that was signed by the Company Secretary and issued to the Nigerian Stock Exchange (NSE), noted that the two main talking points at this meeting are the company’s unaudited Q2 2020 financial statements, and the proposed issuance of bonus shares to the company’s existing shareholders.
As you may well know, board members of many companies listed on the NSE are all scheduled to meet later this month, ahead of the release of these companies half-year 2020 earnings reports. Directors typically meet to consider/approve financial statements before they are released.
Meanwhile, between the time a company’s board of directors meet over their financial statements and the actual release of said financial statements, there is what is called “a closed period”. During this closed period, all persons with insider knowledge of the company’s affairs are prohibited from trading in the company’s stock.
READ ALSO: Cornerstone Insurance Plc appoints new Executive Director
In the case of Cornerstone Insurance Plc, a closed period on its stock will start from tomorrow (July 7th, 2020) and will remain effective until 24 hours after the release of the company’s Q2 2020 financial statements. Note that no date was given for the release of the Q2 financial report.
“Accordingly, in line with the provisions of Rule 17.17: Closed Period, Rulebook of The Exchange, 2015 (Issuers’ Rule) and which has been incorporated into Sections 5 and 6 of the Company’s Securities Trading Policy, all Directors, Persons discharging managerial responsibility, Adviser(s) of the Company, or their connected persons shall not trade in the Company’s shares from Tuesday, July 7th, 2020 until 24 hours after the release of the Company’s Unaudited Financial Statements for the Second Quarter ended June 30, 2020 to the NSE and the general public,” part of the statement by the company said.
Recall that Nairametrics reported some months ago that Cornerstone Insurance Plc was in merger talks with some insurance companies ahead of the recapitalization deadline set by the National Insurance Commission (NAICOM). The company’s Group Managing Director, Ganiyu Musa, disclosed that consolidation is a more viable option towards meeting NAICOM’s recapitalisation requirement.
READ MORE: Dark Clouds loom for investors as stocks fall 8% in first half of 2020
It is uncertain, at this point, if the company is still considering a merger as a viable option. This is because in March 2020, Nairametrics reported that Cornerstone Insurance Plc is one of the insurance firms that have resorted to selling off their real estate properties in order to raise money. The reported had quoted the MD discussing how his company “took the big decision to sell the property which we did at a very handsome price. And just in one fell swoop, it resolved many issues. We now have a significant amount of liquidity, we do not have the headache of recapitalisation and we have done what the regulator wants, which is to convert any property to cash.”
Meanwhile, NAICOM has since postponed the recapitalisation deadline to September 2021 due to the economic challenges posed by the COVID-19 pandemic.
Note that the company reported a gross premium income of N4.6 billion in Q1 2020, compared to N4.8 billion in Q1 2019. However, profit for the period stood at N475.1 million, as against a loss after tax of N98.4 million during the comparable period in 2019.
The company’s stock opened today’s trading on the Nigerian Stock Exchange with a share price of N0.50. Year to date, the stock has gained roughly about 20%.
Financial Services
Conventional insurance firms can now set up their Microinsurance department – NAICOM
NAICOM has issued a circular allowing conventional insurance companies in Nigeria to exploit the huge opportunities in the Microinsurance window.
Financial Services
CBN introduces “Special Bills” as part of efforts to control money supply in the economy
The Central Bank of Nigeria has announced the introduction of a Special Bill with unique features.
Nigeria central bank has announced the introduction of what it calls the “Nigeria Special Bills” in what it claims is an effort to deepen the financial markets.
The apex bank also claims the instrument avails it with an additional liquidity management tool for Nigeria’s financial system.
In a disclosure, signed by the Director of Banking Supervision of CBN, Bello Hassan, and seen by Nairametrics, it said the Special Bills contained the following features
READ: CBN Governor alleges parallel market used for bribes and corruption
- It has a Tenor of 90 days
- It comes with Zero coupon, as the applicable yield at issuance will be determined by the CBN.
- The instrument will be tradable amongst banks, retail and institutional investors.
- The instrument shall not be accepted for repurchase agreement transactions with the CBN and shall not be discountable at the CBN window.
- The instrument will qualify as liquid assets in the computation of liquidity ratio for deposit money banks.
The central bank, yanked off retail and instituional investors from accessing the highly lucrative Open Market Operations bills where yields were previously high. It is unclear if this bills will replace the OMO bills or is permamnent.
What this means: With the introduction of the new Special Bills, the CBN aims to securitize the excess Cash Reserve Requirement balances of local banks by offering them short-dated zero-coupon special bills.
- Since May 2020, the central bank has sequestered over N6 trillion as part of its CRR debits of the accounts of deposit banks.
- Nigeria’s central bank expects commercial banks to maintain a loan to deposit ratio of 65% and thus debits the accounts of commercial banks who do not meet this target for excess deposits.
- According to Nairametrica analysts, this new bill provides the banks with an instrument which they can offer to investors in exchange for a return. For example, the banks can sell the “Special Bills” to investors who need fixed income instrument.
Why it matters: The claims the Special Bills is in line with the “CBN’s goal of ensuring optimal regulation of systemic liquidity and promoting efficient financial markets in support of economic recovery and sustained growth,” however Nairametrics undertands there could be more to this.
However, Nairametrics believes pressure from the banks who have complained about the frequent debits may have resulted in this new Special Bills. In some of the earnings calls listened into by Nairametrics, banks have often cited the drop in their interest income and margins.
What they are saying: A part of the recent CBN disclosure read thus: “The Central Bank of Nigeria (CBN) hereby announces the introduction of Special Bills as part of efforts to deepen the financial markets and avail the monetary authority with an additional liquidity management tool.”
What to expect: The CBN is expected to further clarify the issue and pricing of the recent instrument in coming days.
Financial Services
Fidelity Bank MD/CEO purchases 5 million additional shares worth N12.97 million
The MD/CEO Designate of Fidelity Bank Nigeria Plc has purchased an additional five million units of the bank’s shares.
The Managing Director/CEO Designate of Fidelity Bank Nigeria Plc, Mrs. Nneka Onyeali-Ikpe has purchased an additional five million units of the bank’s shares totalling N12.97million.
This is according to a notification, signed by the bank’s Secretary, Mr. Ezinwa Unuigboje, and sent to the Nigerian Stock Exchange Market yesterday, as seen by Nairametrics.
What you should know
The breakdown of the disclosure showed that the transaction took place in five tranches with an average share price of N2.56.
- First tranche: 260,190 units of the bank’s share were bought at N2.52 each, amounting to N655,678.8
- Second tranche: 400,000 units of the bank’s share were bought at N2.55 each, amounting to N1.02million.
- Third tranche: 130,000 units of the bank’s share were bought at N2.58 each, amounting to N335,400.
- Fourth tranche: 2,870,000 units of the bank’s share were bought at N2.60, amounting to N7.46million.
- Fifth tranche: 1,339,810 units of the bank’s share were bought at N2.56, amounting to N3.43million.
(READ MORE: Fidelity Bank slashes growth forecast, readies Eurobond coupon ahead of due date)
In summary, the total transactions incurred by the MD in buying 5 million additional shares grossed N12.97million.
What this means
The recent corporate action indicates growing optimism in the bank’s future and potentials, which could be a pull factor to other investors.
Covid-19: Moscow commences mass vaccination of Sputnik V shot
US House passes reform bill to decriminalize marijuana
US Government removes visa reciprocity fees for Nigerians from December 3
Pension contributions grew by N184.68 bn in Q3 2020
Young women and lifestyle inflation: Tips to get your financial life on track
COVID-19 Update in Nigeria
COVID-19: Moderna says it will produce 500 million vaccines by 2021
Autogas: Nigerians will not pay N250,000 for conversion, it is free – FG
CBN Governor discloses why they amended procedures for receipt of diaspora remittances
U.S Stocks post record gains across markets spectrum
