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15 Firms’ Exit Costs Stock Market N24.075bn in One Year

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Nigerian Exchange Limited - Investors King
  • 15 Firms’ Exit Costs Stock Market N24.075bn in One Year

The delisting of 15 companies from the Nigerian Stock Exchange in 2016 took away N24,075,418,729.61 capital from the market, findings by our correspondent have shown.

The 15 firms left the market for various reasons such as voluntary intent, regulatory directive, and mergers and acquisitions.

Those affected are G. Cappa Plc, IPWA Plc, West African Glass Industries Plc, Investment and Allied Insurance Plc, Alumaco Plc, Jos International Breweries Plc, Adswitch Plc, Rokana Plc and Vono Products Nigeria Plc.

Others are Lennards (Nigeria) Plc, P.S. Mandrides and Company Plc, Premier Breweries Plc, Costain West Africa Plc, Navitus Energy Plc and Nigerian Ropes Plc.

The market capitalisation of the respective firms as of the time of delisting was given as N1.717bn, N257.07m, N131.427m, N14bn, N557.201m, N809.280m, N203.758m, N30m, N484.74m, N210.492m, N214m, N2.888bn, N542.191m, N62.118m and N1.966bn, respectively.

Vono Products Plc was delisted after its merger with Vitafoam, while the others were delisted as a result of non-compliance with their post-listing obligations.

However, the NSE only succeeded in listing one firm throughout 2016. The firm listed was a Port Harcourt-based industrial cleaning, contamination and waste management company known as The Initiates Plc.

Specifically, the company was listed by the introduction of 889,981,552 ordinary shares of 50 kobo each on the Alternative Securities Market Board at the price of N0.85 per share.

The outstanding shares for each of the delisted companies, according to the NSE, are 125,000,000; 514,140,713; 208,614,500; 28,000,000,000; 75,604,049; 562,000,000; 125,005,250; 50,000,000; 563,651,183; 70,164,062; 40,000,000; 979,211,412; 1,084,382,980; 98,600,000; and 263,668,295, respectively.

As part of efforts to further improve market transparency and integrity, provide timely information for investment decisions as well as enhance the protection of investors in the capital market, the NSE last year commenced the use of enhanced Compliance Status Indicator codes on the ticker tape for listed companies. This became effectively on May 9, 2016.

Under this initiative, the Exchange tags all listed companies with a three character code that indicates their compliance status at any particular point in time. This compliance code enables investors to make informed decisions, while ensuring a transparent market guided by timely information.

The General Counsel and Head of Regulation, NSE, Ms. Tinuade Awe, said, “The revision of the existing codes and introduction of new CSI codes complement existing compliance structures of the Exchange and it will work in tandem with the X-Compliance Report, which we publish weekly on our website.

“This initiative of the Exchange, which is in line with global best practices, is designed to maintain market integrity and protect the investors.”

The Executive Director, Market Operations and Technology, NSE, Mr. Ade Bajomo, also said, “We are implementing the CSI code to improve the quality of our market data as well as ensure transparency in providing compliance related information about listed companies.

“The delivery of market data and associated services is an essential building block in the Exchange’s strategy as it seeks to reach a wider audience to improve market integrity and facilitate informed investment decision making.”

The Chief Executive Officer, NSE, Mr. Oscar Onyema, recently said the market would be listing more firms this year. Already, the Exchange has listed five securities this year.

“We expect investors to continue to keep a close eye on the divergence between the interbank foreign exchange rate and other exchange rates in the country. Accordingly, a convergence of forex rates in the country and the performance of listed corporates will determine the level of market activity in the short term,” Onyema added, noting that the NSE would be introducing more tailor-made products for investors.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Ecobank Pays Off $500 Million Eurobond

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Ecobank - Investors King

Ecobank Transnational Incorporated (ETI) has announced the successful repayment of its $500 million Eurobond.

The Eurobond, issued in April 2019 with a coupon rate of 9.5%, matured on April 18, 2024, and was listed on the London Stock Exchange.

The repayment, totaling $524 million inclusive of principal and interest, underscores Ecobank’s commitment to financial prudence and investor confidence.

The bond garnered substantial support from a diverse group of global investors, including development banks, FMO, and Proparco, serving as anchor investors.

Mr. Ayo Adepoju, Ecobank’s Group CFO, emphasized the significance of the inaugural bond in broadening the institution’s investor base and enhancing its visibility in global capital markets.

Despite challenges in the operating environment, such as disruptions in the global supply chain and financial markets, Ecobank has demonstrated resilience through robust liquidity, a solid balance sheet, and effective leadership.

This repayment marks Ecobank’s commitment to fulfilling its financial obligations and maintaining strong relationships with investors.

While this Eurobond repayment closes a significant chapter, it also reflects Ecobank’s ongoing efforts to navigate challenges and sustain its position as a leading financial institution in Africa.

As Ecobank clears this debt, it reinforces its reputation for financial stability and prudent management, setting a positive trajectory for future growth and continued success in the dynamic global financial landscape.

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Finance

SEC to Guard Against Illicit Funds Influx Amid Banking Recapitalisation

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Securities and Exchange Commission

In response to the recent banking recapitalization exercise announced by the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) has reiterated its commitment to safeguarding the integrity of the capital market against the influx of illicit funds.

This announcement came during a symposium organized by the Association of Capital Market Academics of Nigeria, where the Executive Director (Operations) of SEC, Dayo Obisan, addressed stakeholders on the implications of the banking sector recapitalization for the Nigerian capital market.

Obisan expressed the commission’s determination to collaborate with stakeholders to prevent the entry of laundered funds into the capital market.

He stressed the need for fund verification exercises to ensure transparency and accountability in capital inflows.

While acknowledging that fund verification is not typically within SEC’s purview, Obisan stated the commission’s willingness to collaborate with other regulators to prevent the entry of illicit funds into the market.

He said it is important to engage institutions such as the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) in verifying the legitimacy of funds entering the market.

Obisan also announced regulatory engagements aimed at enhancing the quality of filings and ensuring compliance with anti-money laundering regulations. These engagements seek to streamline the application process and mitigate the risk of illicit fund inflows from the onset.

Meanwhile, the President of the Chartered Institute of Stockbrokers, Oluwole Adeosun, maintained that the capital market can support the fresh capitalisation exercise.

He said, “The market is able and has expanded in the last ten years to be able to withstand any challenges with this capital raising exercise. It is important to know that investors have started to position themselves in the stocks of Tier 1 banks with the announcement of the planned recapitalisation last year.”

Adeosun also called on the banks to consider other options beyond the right issues, as had been seen in recent days in the sector, given the size of the funds needed to be raised as well as to bring in a fresh set of investors into the market.

“There should be more than a rights issue. We believe that some of them should go by private offer and public offer because the capital is huge so that we can bring in more shareholders into the market. We believe it is another opportunity for Gen Zs and millennial investors to come into the market.

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Finance

Nigerian Ports Authority Secures $700m Loan from Citibank for Lagos Ports Rehabilitation

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Nigerian ports authority

The Nigerian Ports Authority (NPA) has successfully secured a $700 million loan from Citibank to facilitate the rehabilitation of the Lagos ports.

The finance was facilitated by the UK Export Finance to revitalize the Apapa and Tincan Island Ports, two pivotal gateways for maritime trade in Nigeria.

The announcement was made during a signing ceremony held in Lagos, marking a pivotal moment in Nigeria’s efforts to modernize its port infrastructure.

Mohammed Bello-Koko, the Managing Director of the NPA, expressed optimism regarding the prompt commencement of the reconstruction efforts following the finalization of the funding agreement.

The rehabilitation project is expected to address longstanding challenges faced by the Apapa and Tincan Island Ports, including congestion, inadequate infrastructure, and operational inefficiencies. By modernizing these key maritime hubs, Nigeria aims to bolster its trade capabilities, enhance port efficiency, and stimulate economic growth.

Speaking at the ceremony, Bello-Koko highlighted the strategic significance of the Citibank Facility, citing its favorable terms and affordable interest rates as key advantages for the NPA.

Bello-Koko outlined the NPA’s broader strategy to upgrade port facilities beyond Lagos, with discussions underway to secure additional funding for the enhancement of Eastern Ports such as Calabar, Warri, Onne, and Rivers Ports, as well as the reconstruction of Escravos Breakwater.

The collaboration between the NPA and Citibank underscores the importance of public-private partnerships in driving infrastructural development.

Ireti Samuel-Ogbu, Managing Director of Citibank Nigeria Limited, reaffirmed the bank’s commitment to supporting the NPA and the Federal Government in bridging the infrastructural gap.

Samuel-Ogbu commended the NPA’s strategic initiative and underscored Citibank’s dedication to facilitating the project’s success.

 

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