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Airtel to pay shareholders that hold shares on the NSE dividend at N386/$1

Airtel said it will pay shareholders that hold their shares on the NSE dividend in naira at N386/$1.

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Raghunath Mandava, Airtel Africa, Airtel to pay shareholders that hold shares on the NSE dividend at N386/$1

Airtel has announced that shareholders holding their shares on the NSE, who do not indicate their currency of choice before November 27 will be paid their dividends in naira at N386/$1.

This information was conveyed through a corporate disclosure announcing its interim dividend payments and the currency exchange rates. The disclosure was published on the website of the NSE  and signed by the Group’s Secretary, Simon O’Hara.

The company advised in the document that shareholders that hold their shares on the NSE may elect to receive their entire dividend payment in Dollars, while shareholders on the London Stock Exchange (LSE) may elect to receive their entire dividend payment in GBP or USD Dollar.

In light of this, the company submitted that the following currency exchange rate will be applicable in the determination of the interim dividend payment to any shareholders that qualify for and have elected to receive the interim dividend payment.

(READ MORE: Airtel earmarks a total interim dividend of $56 million for shareholders)

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Exchange Rate

1 USD = 386 Naira

1 USD = 0.7534 GBP

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The company noted that the exchange rate for the Naira amounts payable was determined by reference to the exchange rates applicable to the US Dollar available on 10 November 2020.

What you should know

  • The CBN official exchange rate currently stands at N379. The rate has not changed since the 6th of August 2020, when it increased by 5.27% from N360 on the 5th of August to N379.
  • Further checks revealed that the exchange rate for the US$/Naira applied by the company appears to be that of NAFEX. The NAFEX rate had opened at N385.83 and closed at N385.67 on Tuesday 10th November. The rate also closed at N385.67 on Thursday 12th November.

(READ MORE: Naira falls across forex markets, demand pressure increases despite huge dollar supply)

What this means

Considering that the CBN rate was N379/$1 the day the decision was made, it may be argued that the N386/$1 proposed by the company is a fair decision on the NSE shareholders of the company. This is because compared with the CBN rate, shareholders gained N6 per dollar on the conversion.

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However, compared with the rate at the parallel market, which had opened and closed at N457/$1 on the day the decision was made – Tuesday 10th November, one may argue that shareholders would have wanted more in terms of currency conversion. Viewed from the parallel market exchange rate angle, NSE shareholders may conclude that they lost N71 per dollar on the conversion.

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Key metrics

  • Airtel Africa Plc’s share price is N489.9, the highest price for a unit of share in 52 weeks is N489.9 and the lowest was N298.9.
  • The market capitalisation as at close of business Thursday, November 12 stood at N1.70 trillion.
  • The company reported revenues of $851 million in 2020 Q2, $57 million post-tax profits and 1.1 cents Earnings Per Share.

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Stock Market

Nestlé S.A purchased 666,596 additional shares of Nestlé Nigeria Plc in 17 days

Nestlé S.A. has acquired 666,596 additional shares of its Nigerian subsidiary, worth ₦933 million in 17 days.

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Why Nestle Nigeria’s return remains strong - EFG Hermes, Nestle Nigeria Plc appoints new Director, Nestle Plc: FY 2019 Revenue beats estimate; but profit underperforms, GTB, Zenith Bank, & Nestle emerge as Renaissance Capital’s top stock picks, Nestlé’s parent company acquires additional shares worth ₦300 million

Nestlé S.A has purchased a total of 666,596 additional shares of its Nigerian subsidiary, Nestlé Nigeria Plc, in a deal worth N933.95 million.

According to the four different notifications issued between 11th to 27th of November by the Company’s Secretary, Mr. Bode Ayeku, and seen by Nairametrics, Nestlé S.A purchased the ordinary shares of Nestlé Nigeria Plc in this order:

  • On 10th November, 214,924 additional shares worth N300.89 million, at a price of N1,400.00 per share.
  • On the 17th and 18th November, 331,045 additional shares worth N463.46 million, at a price of N1,400.00 per share.
  • On 20th November, 102,690 additional shares worth N143.77 million, at a price of N1,400.00 per share.
  • On 25th and 27th November, 17,937 additional shares worth N24.82 million, at a price of N1,384.00 per share.

This brings the total shares of Nestlé Nigeria Plc purchased by Nestlé S.A to 666,596, and the total consideration for these shares is put at N932.95 million.

What this means

The purchase of the shares of Nestlé Nigeria further cements the position of Nestlé S.A’s as the majority shareholder of the company.

In line with the information contained in the financial statements of the company as of 30th September 2020, the company had exactly 792,656,252 shares outstanding, with Nestlé S.A being the majority shareholder (525,537,201 units) – 66.30% of the total shares of the company outstanding.

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Hence, with the 666,596 additional units purchased, Nestlé S.A’s ownership percentage of Nestlé Nigeria is now put at 66.38%.

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Market Views

Airtel, Mobil, FCMB lead Nigerian Stocks Up W/W, investors gain N390 billion

The All-Share Index and Market Capitalization appreciated by 2.19% to close the week at 34,885.51 and N18.228 trillion respectively.

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Nigerian Stocks ended the week bullish cumulatively. The All-Share Index and Market Capitalization appreciated by 2.19% to close the week at 34,885.51 and N18.228 trillion respectively.

Investors gained N390.26 billion. A total turnover of 1.816 billion shares worth N25.791 billion in 31,665 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 11.400 billion shares valued at N35.892 billion that exchanged hands last week in 39,265 deals.

READ: Nigerian Tier-2 banks fired up, investors profit up N1 trillion W/W

  • The Financial Services Industry (measured by volume) led the activity chart with 1.274 billion shares valued at N14.710 billion, traded in 18,392 deals; thus, contributing 70.15% and 57.04% to the total equity turnover volume and value respectively.
  • The Conglomerates Industry followed with 217.170 million shares worth N231.809 million in 1,226 deals. The third place was the Consumer Goods Industry, with a turnover of 113.760 million shares worth N2.598 billion in 4,568 deals.
  • Trading in the top three equities namely Zenith Bank Plc, Transnational Corporation of Nigeria Plc, and Access Bank Plc (measured by volume) accounted for 649.529 million shares worth N8.104 billion in 6,395 deals, contributing 35.76% and 31.42% to the total equity turnover volume and value respectively.
  • Twenty-seven (27) equities appreciated at price during the week, higher than twenty-one (21) equities in the previous week. Forty-three (43) equities depreciated in price, lower than fifty-five (55) equities in the previous week. Ninety-one (91) equities remained unchanged, higher than eighty-five (85) recorded in the previous week.

READ: GTBank obtains approval-in-principle from CBN to operate as financial holding company

Top 10 gainers W/W

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  1. UPDC REAL ESTATE INVESTMENT TRUST up 32.53% to close at N5.50
  2. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC up 12.03% to close at N2.70
  3. NCR (NIGERIA) PLC. up 10.00% to close at N1.98
  4. 11 PLC (MOBIL) up 9.89% to close at N208.80
  5. UNIVERSITY PRESS PLC. up 9.52% to close at N1.38
  6. UNITED CAPITAL PLC up 8.16% to close at N4.77
  7. CORONATION INSURANCE PLC up 7.32% to close at N0.44
  8. FCMB GROUP PLC. up 7.26% to close at N3.25
  9. AIRTEL AFRICA PLC up 7.00% to close at N535.00
  10. AXAMANSARD INSURANCE PLC up 6.36% to close at N2.34

Top 10 losers W/W

  1. JAPAUL OIL & MARITIME SERVICES PLC down 11.11% to close at N0.24
  2. HONEYWELL FLOUR MILL PLC down 10.83% to close at N1.07
  3. CUSTODIAN INVESTMENT PLC down 10.00% to close at N5.85
  4. CHAMPION BREW. PLC. down 9.43% to close at N0.96
  5. TRANS-NATIONWIDE EXPRESS PLC. down 9.38% to close at N0.87
  6. LINKAGE ASSURANCE PLC down 9.09% to close at N0.50
  7. WEMA BANK PLC. down 9.09% to close at N0.70
  8. PORTLAND PAINTS & PRODUCTS NIGERIA PLC down 8.42% to close at N2.61
  9. ARDOVA PLC down 8.33% to close at N13.75
  10. NASCON ALLIED INDUSTRIES PLC down 8.05% to close at N16.00

READ: MTN Nigeria, Dangote Cement stocks fired up, investors gain whopping N708 billion

Outlook

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Nigerian Stocks unsurprisingly recorded impressive gains W/W, as investors increased their buying pressure, especially buying from dips across the market spectrum.

Nigerian’s crude, selling at $48/barrel, boosted the Nigerian central bank dollar cash inflow. Also, the Apex Bank last concluded MPC meeting left all key indicators unchanged, kept Nigerian Bank stocks investors relieved, amid the bias that Nigerian banks would have enough headway in mitigating the prevailing economic uncertainties currently in play.

READ: Access Bank, First Bank up, investors gain N747 billion W/W

  • Stock experts anticipate the present bullish run currently playing at Africa’s best-performing equity market will remain in the coming week, albeit alongside profit-taking.
  • However, Nairametrics, envisage cautious buying, taking into consideration the low presence of the Foreign portfolio investors amid low investments seen lately in the Nigerian Stock Exchange amid stringent capital controls set in place by Nigeria’s Apex bank could limit the Stocks bull upside in the long term.

Explore Data on the Nairametrics Research Website

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Financial Services

Stamp Duty on Nigerian Stock market transactions pegged at 0.08% from December 7

The NSE has given clarifications on the public notice released by the FIRS, itemizing contract notes at an ad valorem rate of 0.08%.

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NSE prepares to launch West Africa’s first Exchange-traded derivatives

The Nigerian Stock Exchange has given clarifications on the public notice released by the Federal Inland Revenue Service (FIRS) in July, itemizing contract notes at an ad valorem rate of 0.08% up from 0.075%, effective 7th December 2020.

The circular released by the Nigerian Stock Exchange reads:

“In reference to the Public Notice in the Business Day Newspaper of Monday, 20 July 2020, captioned ‘Clarification of Administration of Stamp Duties in Nigeria’ issued by the Federal Inland Revenue Service (FIRS) (A copy is attached as Appendix A for ease of reference).

The Public Notice provided, amongst other things, information on dutiable instruments and the applicable flat or ad valorem rates, with Contract Notes 1 itemized at an ad valorem rate of 0.08%. As you know, this is at variance with the current rate of 0.075% administered in the Nigerian Capital Market.”

To that extent, Dealing Members of the Nigerian Stock Exchange are to note the following:

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  • Effective December 7, 2020, the Central Securities Clearing System Plc. (CSCS) will adjust its system to implement the automated deduction of the Stamp Duty rate of 0.08%.
  • Dealing Members are required to immediately engage their software vendors for the required adjustments to their technology applications, to reflect the 0.08% rate ahead of the effective date of 7 December 2020.
  • Dealing Members are required to communicate the changes above to their clients immediately, ahead of the effective date.

What you should know

Nairametrics revealed that the FIRS listed at least 50 types of transactions that are eligible for stamp duty deductions.

Some of the listed chargeable transactions include bank deposit or transfer, loan agreement, Memorandum of Understanding (MoU), sales agreement, will, tenancy/lease agreement, and all receipts.

The FIRS noted that the recently inaugurated FIRS Adhesive Stamp is not the same as the postage stamp administered by NIPOST for the purposes of delivery of items and documents.

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The Stamp Duties Act, 19391 defines Contact Notes as “the note sent by a broker or agent to his principal, or by any person who, by way of business, deals, or holds himself out as dealing, as a principal in any stock or marketable securities, advising the principal, or the vendor or purchaser, as the case may be, of the sale or purchase of any stock or marketable security, but does not include a note sent by a broker or agent to his principal where the principal is himself acting as broker or agent for a principal.”

See the circular below:

Download (PDF, 566KB)

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