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Afrinvest Endorses Lagos Municipal Bond



  • Afrinvest Endorses Lagos Municipal Bond

Afrinvest Securities Limited, a subsidiary of Afrinvest (West Africa) Limited, has endorsed the Lagos State Municipal Bond.

The investment banking and financial services firm, in a report on Monday, said its recommendations were informed by the company’s valuation perspective and the risk to its valuation.

The firm said, “Given our valuation perspective and the risk to our plausible valuation, we believe it is optimal to invest in the Lagos state bond instrument as the state over time has proven to be a more viable economy accounting for over 60 per cent of economic activities in the country.

“When compared to the Federal Government sovereign bonds, the Lagos state bond instrument appears to be more attractive in terms of credit worthiness and interest rate.”

The government of Lagos State, through the Ministry of Environment, introduced the Cleaner Lagos Initiative in 2016 to manage the waste system. Accordingly, a Special Purpose Vehicle – the Municipality Waste Management Contractors Limited – was incorporated for the purpose of issuing medium-term notes to finance implementation of the CLI.

Consequently, the Municipality Waste Management Contractors Limited is undertaking a five-year N50bn medium -term note programme to be issued in two series. The first series of the programme was opened for subscription on August 14, 2017 with 27 million units of the bond on offer, priced at N1, 000 and 100 per cent par value.

According to Afrinvest, the offer closes on August 25, 2017 and successful subscriptions will be allotted on September 1, 2017.

The coupon rate quoted for the LASG bond instrument was 17.5 per cent, implying a 110 basis points credit spread relative to the Federal Government’s benchmark of similar maturity currently at a rate of 16.4 per cent.

The LASG recently issued a 10-year bond at 17.25 per cent and seven-year note at 16.75 per cent with credit spreads of 75 basis points and 25 basis points, respectively when benchmarked against the Federal Government sovereign bonds.

Afrinvest said, “From a fundamental perspective, we used term structure of the interest rate (on the bond yield curve) to obtain spot rates from six months to five years as discounting factor for our valuation. We also moderated the credit spread to 0.5 per cent in our model and arrived at a discounted price of N96.84 and an implied yield of 18.5 per cent.

“As a result of the medium term note being fully backed by an Irrevocable Standing Payment Order by the LASG and the bond being National Pension Commission-compliant, we note that the probability of default is low and thus recommend the instrument a ‘buy’.”

Lagos is the commercial nerve center of the country, with Internally Generated Revenue in excess of N300bn as at year end 2016. Based on an average annual growth rate of three per cent, it is estimated that the population of Lagos would be over 30 million by 2025. The LASG has been actively participating in the local bond market and has issued series of bond instruments which have been largely successful in the past.

The state recently raised N85bn in bonds in order to fund environmental and infrastructure projects as part of the N500bn bond programme approved by the State House of Assembly in 2016 of which N50bn was raised in 2016. The N85bn was issued in two tranches: N46.3bn was raised with a seven-year maturity at 16.75 per cent while N38.75bn was raised with a 10-year maturity at 17.25 per cent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


MTN Nigeria Generates N1.35 Trillion in Revenue in 2020




MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020




Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website:, complete and submit to the Registrar or their respective Banks.

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Banking Sector

Dennis Olisa Invests N53.6 Million in Zenith Bank



Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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