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Nigerian Exchange Group Plc Releases Positive Financial Results for Q3 2021

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Group Plc released its financial results for the third quarter ended September 2021.

The results showed revenue increasing from N3.7 Billion in 2020 to N4.3 Billion in 2021 driven by an increase in listing fees from N376.5 Million in 2020 to N423.2 Million in 2021. The Exchanges’s investment in technology continued to bear fruit as revenue from Market data rose from N246 Million in 2020 to N253.8 Million in 2021.

Personnel expenses rose from N2 Billion in 2020 to N2.2 Billion in 2021, this saw operating profit increase from N327 Million in 2020 to N710 Million in 2021. Recognition of its share of profit in its associates of N1 Billion saw profit for the period increase from N1.3 Billion in 2020 to N1.5 Billion in 2021 (Nigerian Exchange Group has a 29.19% investment stake in CSCS Ltd as of September 2021 and has a 27.7% investment stake in NG Clearing as of September 2021)

The Nigerian Exchange Group Plc (“NGX Group”) formerly known as the Nigerian Stock Exchange, was incorporated in Nigeria as a private Exchange Limited by shares on 15 September 1960 as Lagos Stock Exchange and its name was changed to The Nigerian Stock Exchange on 15 December 1977. The Exchange was re-incorporated as an Exchange Limited by Guarantee on 18 December 1990. In 2021, the Nigerian Stock Exchange was fully demutualized changing from a member-owned not-for-profit entity into a shareholder-owned, profit-making entity. This gave rise to a new structure – Nigerian Exchange Group Plc (NGX Group) with subsidiaries – Nigerian Exchange Limited (NGX Exchange), NGX Regulation Limited (NGX REGCO), and NGX Real Estate Limited (NGX RELCO). The address of the NGX Group’s registered office is Stock Exchange House, 2/4 Customs Street, Lagos.

The principal activities of Nigerian Exchange Group Plc (“NGX Group”) and subsidiaries (the Group) include listing and trading securities, licensing, market data solutions, ancillary technology, regulation, real estate, and more through its wholly-owned subsidiaries – NGX Exchange, NGX REGCO, and NGX RELCO.

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Capital Market

Fixed Income Market Turnover Sees 30.47% Decline Despite Bond Activity

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Bonds- Investors King

In June 2024, the FMDQ Securities Exchange reported a 30.47% decline in the fixed-income market turnover from the previous month.

Despite this downturn, bond trading showed resilience, particularly in the Other Bonds category, which saw a 60.51% increase.

The overall turnover for fixed income products, including FGN Bonds and T-Bills, fell to N7.72 trillion.

This decrease was attributed to lower trading volumes across all major categories, although bond activity remained a bright spot.

Trading intensity for FGN Bonds and T-Bills slightly decreased, reflecting reduced investor activity.

However, T-Bills with maturities between six months and a year, alongside FGN Bonds with terms between five and ten years, were the most traded, accounting for a significant portion of the market turnover.

The sovereign yield curve continued its inversion trend, with real yields staying negative due to inflation outpacing policy interest rates.

The money market also experienced a decline, with turnover dropping by 34.50% to N8.22 trillion. Repos and unsecured transactions were primarily responsible for this decrease.

Conversely, the FX derivatives market saw growth, rising by 43.20% due to increased FX swap activities, despite a downturn in FX forwards.

These fluctuations highlight the ongoing challenges in Nigeria’s financial markets, with inflation and currency depreciation posing significant hurdles.

The decline in turnover suggests cautious investor sentiment amidst an uncertain economic landscape.

Despite these challenges, certain segments like bond trading and FX derivatives continue to show potential, offering avenues for strategic investment and market stability.

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Capital Market

Nigeria Leads Africa in Private Equity Deals, Records $2.59 Billion in Q1 2024

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private-equity

Nigeria has emerged as the epicenter of private equity activity across Africa as $2.59 billion worth of deals were done in the first quarter of 2024.

This surge represents a 321.8% increase compared to the same period last year, indicating Nigeria’s robust potential amidst global economic shifts.

The data, analyzed by DealMakers Africa, a leading authority on mergers, acquisitions, and corporate finance in the continent, revealed Nigeria’s pivotal role in driving regional investment trends.

According to the report, this surge in private equity investments was predominantly fueled by strategic transactions in the energy sector and the burgeoning educational technology (edtech) industry.

Nigeria’s ascendancy in private equity deals marks a reversal from previous trends, where in Q1 2023, other African nations like Zimbabwe had momentarily surpassed it in mergers and acquisitions value.

This year, however, Nigeria not only reclaimed its leading position but also outpaced other significant economies in the region, with Zambia, Morocco, Kenya, and Egypt following with notable but comparatively lower investment figures.

Among the standout deals contributing to Nigeria’s stellar performance, Shell’s $2.4 billion divestment of its onshore oil and gas subsidiary to Renaissance Africa Energy stands as the largest transaction in the quarter.

This landmark deal not only bolstered Nigeria’s overall investment portfolio but also signaled continued interest and confidence from global investors in the country’s energy sector potential.

Commenting on the findings, analysts highlight Nigeria’s strategic advantages, including a sizable market, abundant natural resources, and a dynamic entrepreneurial ecosystem that continues to attract substantial foreign and domestic capital.

The report also emphasizes West Africa’s prominence in regional investments, with Nigeria at its core, recording a cumulative $2.6 billion in deal value across various sectors.

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Capital Market

Stanbic IBTC Holdings to Raise N550bn Through Debt Issuance, Rights Issue

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Stanbic IBTC - investorsking.com

Stanbic IBTC Holdings, one of Nigeria’s leading financial institutions, is set to raise a total of N550 billion through a combination of debt issuance and a rights issue.

This ambitious move comes amidst the backdrop of regulatory changes and the need for financial institutions to bolster their capital bases to meet new requirements set by the Central Bank of Nigeria (CBN).

The announcement was made in a notice of the company’s annual general meeting filed with the Nigerian Exchange Limited.

According to the disclosure, Stanbic IBTC Holdings plans to establish a debt issuance program with a capacity of up to N400 billion.

This program will enable the company to issue various forms of debt securities, including senior unsecured or secured, subordinated, convertible, preferred, equity-linked, or other forms of debt obligations.

Also, the board of Stanbic IBTC Holdings is seeking shareholder approval to raise additional equity capital of up to N150 billion through a rights issue or offer for subscription.

Shareholders will also vote on increasing the company’s issued and paid-up share capital to accommodate the proposed capital raise.

Stanbic IBTC Holdings has been a key player in Nigeria’s financial landscape, with a strong track record of performance and a diverse range of financial services.

The proposed capital raise is expected to provide the company with the necessary resources to pursue growth opportunities, enhance its market position, and continue delivering value to shareholders and stakeholders alike.

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