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African Stock Exchanges’ Potential to Support Region’s Economic Development Mapped Out in New Focus Report

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A new focus report, produced by Oxford Business Group (OBG) with the African Securities Exchanges Association (ASEA), explores efforts under way to integrate the region’s stock markets, which is gathering pace on the back of growing awareness among key players of the need to build resilience and diversify the investor base.

Titled “African Stock Exchanges”, the wide-ranging study provides detailed analysis of the trends, opportunities and challenges evident across the continent’s financial sector, and its capital markets in particular, in an easy-to-navigate and accessible format, supported by key data and infographics.

The focus report shines a spotlight on the African Exchanges Linkages Project (AELP), which aims to connect stock exchanges regionally and foster both investment and trade, following a pilot phase that involves seven leading exchanges.

The AELP is a joint initiative of ASEA and the African Development Bank, funded by the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund, one of the Bank’s bilateral funds. The project is expected to increase the depth and liquidity of the region’s capital markets, while benefiting from anticipated heightened trade activity under the African Continental Free Trade Area agreement.

The report also tracks the technological advances that have been made across the continent’s larger exchanges and are now being replicated in key smaller markets. The benefits digital solutions offer, which include facilitating the delivery of a larger range of products and services quicker and at a lower cost, are a key focus.

In addition, the report considers the impact on African exchanges of rising demand for more sustainable investment products, analysing moves under way at some of the region’s larger markets, in particular, to sharpen the focus on environmental, social and governance reporting.

Other topical issues looked at include the steps being taken by governments across the continent to improve the regulatory environment, which will be key in positioning exchanges to play a major part in supporting the region’s economic development.

The study also examines the challenges that several of the regional exchanges face in their expansion efforts, which range from limited liquidity and comparatively few listings to minimal participation from retail investors.

The report features 16 case studies, which chart the development of key exchanges across the continent, alongside contributions from a broad range of business leaders.

It also contains a wide-ranging foreword by Félix Edoh Kossi Amenounve, ASEA President,as well as CEO of Bourse Régionale des Valeurs Mobilières (BRVM), in which he discusses the steps needed to increase the part played by the region’s capital markets in Africa’s economic transformation.

“For the most part, African stock exchanges remain modest in size and liquidity, and therefore their contribution to economic development continues to be marginal,” he said. “There is a need to encourage enthusiasm in African securities and address the lack of depth in the market to support major operations; we must supply stock exchanges with more listed companies and boost demand for securities by developing institutional savings mechanisms and mobilising citizens’ savings through concerted efforts at enhancing financial literacy.”

Commenting after the launch, Karine Loehman, OBG’s Managing Director for Africa, said that while exchanges had felt the weight of the pandemic, a recovery was now taking shape, buoyed by advancements in their operating models and an awareness amongst investors of the region’s potential.

“Near-term challenges remain an issue, in part due to the economic situation of individual markets and the impact of external headwinds,” Loehman said. “However, there is a growing realisation among governments, regulators and the international business community of the potential that stock exchanges offer African countries to unlock capital and galvanise intra-regional growth at a time when the continent is poised for a period of major development.”

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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Nigerian Exchange Limited

Nigeria’s Market Falls 1.09% Amid Decline in Key Sectors

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Nigeria’s stock market closed the trading week ended Friday, April 12, with a decline of 1.09% following a downturn influenced by notable drops in the banking, insurance, and consumer goods sectors.

This shift resulted in a loss of about N638 billion for investors during the two-day trading week, which was shortened due to public holidays for Eid Mubarak.

The Nigerian Exchange Limited’s (NGX) All-Share Index (ASI) decreased from an opening high of 103,437.67 points to 102,314.56 points.

Meanwhile, market capitalization also dropped from N58.498 trillion to N57.860 trillion over the review period.

The market’s month-to-date (MtD) performance fell by 2.15%, and the year-to-date (YtD) return is now at 36.83%.

Futureview research analysts had previously forecasted a mixed performance in the equities market as investors adjusted their positions in anticipation of upcoming corporate actions and dividend payouts.

The analysts also predicted a possible shift in focus towards the fixed income market, which could influence short-term investment decisions.

While the market faced challenges this week, analysts expect a resurgence of buying interest driven by upcoming corporate actions and earnings reports, attracting investors looking to benefit from dividend payments.

Their recommendation to investors is to consider investing in high-quality stocks with strong fundamentals for potential returns.

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Zenith Bank to Pay N109.88bn Dividends to Shareholders for 2023

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Zenith Bank, one of Nigeria’s leading financial institutions, is set to distribute dividends totaling N109.88 billion to its shareholders for the 2023 financial year.

The announcement was made as part of the bank’s annual report filed with the Nigerian Exchange Limited on Monday.

The dividends amount to N4.00 per share. This includes a final dividend of N3.50 per share and an interim dividend of N0.50 per share paid earlier in the year.

The proposed dividends are subject to approval by shareholders at the next Annual General Meeting (AGM) and are payable from the retained earnings accounts as of December 31, 2023.

Throughout the fiscal year, Zenith Bank’s gross earnings surged by 125.50 percent to N2.13 trillion compared to N945 billion in the previous year.

The increase in gross earnings contributed to the bank’s impressive profit after tax, which increased to N676.91 billion, an increase from N223.91 billion recorded in 2022.

This positive performance was driven by the increase in interest and similar income, which rose to N1.14 trillion from N540 billion.

However, the bank experienced a decline in net income on fees and commission, dropping to N109.31 billion from N132.79 billion in 2022, indicating a 17.68 percent decrease.

This decline was attributed to an increase in fees and commission expenses, which grew to N68.21 billion from N24.42 billion in the previous year.

Also, Zenith Bank disclosed various operational expenses incurred during the year, including insurance premiums paid to Zenith General Insurance Limited and Prudential Zenith, as well as payments for information technology services rendered by Cyberspace Network.

 

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Nigerian Exchange Limited

VFD Group Plc’s Rights Issue Listed on NGX’s Daily Official List

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The Nigerian Exchange Limited (NGX) has listed VFD Group Plc’s Rights Issue on its Daily Official List.

The move follows the approval by the Securities and Exchange Commission (SEC) and represents a crucial step in the company’s growth trajectory.

The Rights Issue comprises 63,342,455 ordinary shares of 50 kobo each priced at N197.33 per share, bringing the total value of the issue to N12.499 billion. With this listing, VFD Group Plc’s total issued and fully paid-up shares have surged from 190,027,365 to 253,369,820 ordinary shares.

According to a report by NGX, the additional shares listed arose from VFD’s Rights Issue on the basis of one ordinary share for every three ordinary shares held as of October 12, 2023.

This move underscores VFD Group Plc’s commitment to expanding its shareholder base and enhancing liquidity in the market.

The approval by SEC for the Rights Issue further solidifies VFD Group Plc’s position in the market. Gbeminiyi Shoda, the Group Company Secretary of VFD Group Plc, confirmed that the Qualification Date for the Rights Issue was October 12, 2023, with the application list opening on December 20, 2023, for a maximum period of 31 days.

VFD Group Plc’s Rights Issue comes on the heels of its recent listing on the Main Board of the Nigerian Exchange Limited (NGX). The listing of 190 million units of shares at N244.88 per share added N46.527 billion to NGX’s market capitalization, reflecting the company’s growing influence in the Nigerian capital market.

VFD Group Plc, known for its sector-agnostic proprietary investment approach, aims to create positive and socially conscious ecosystems by aggregating potentially viable businesses. The Rights Issue listing underscores the company’s strategic move to increase visibility, access capital, and enhance liquidity, ultimately benefiting its investors and stakeholders.

Investors and market analysts are closely watching the developments surrounding VFD Group Plc as it continues to expand its footprint in the Nigerian financial landscape. With the successful listing of its Rights Issue on NGX, the company is poised for further growth and value creation in the market.

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