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According to the General Manager/Chief Operating officer, Centrepoint Securities Limited, Mr. Jire Oyewale, investments in shares should not be based solely on profits declared by companies.

Oyewale, who spoke to our correspondent on Monday noted that it was the duty of stockbrokers to direct their clients not to put their funds in a stock because the price is high, or because the company declared huge amounts of profits.

According to him, “Any good broker would advise his client before he invests in any stock to compare the price of the particular stock that holds his interest, vis-a vis the price of other stocks in that sector, especially, the prices of the market leaders in the sector.”

Oyewale explained that in each sector of the capital market, there were some stocks which were the market leaders of such sectors, and was is left for the stockbroker and investors to study the behaviour of such stocks before decisions are made as to whether to invest in some other stocks in the sector.

“It does not make much sense for the price of a stock which is not a market leader in a sector to be higher than the price of the market leader in that sector. So, if an investor sees such a stock, it may be wise for him to take his time, before he invests in it.”

Oyewale said that it often happened that such stocks would not be stable in price, and their prices in the market would keep fluctuating, until it reached an equilibrium price, which would usually be in the range of the prices of the market leaders in that sector.

The Managing Director, Chief Executive Officer, Signet Securities and Investments Limited, Mr. Dipo Aina, also warned investors to act wisely when it came to investing their monies.

Tuesday, April 22, 2008

FOLLOWING plans by Chevron Corporation USA to divert its holding from Chevron Oil Nigeria Plc, the Nigerian Stock Exchange’s management yesterday placed the company’s stock on full suspension.

With the development, trading on the company’s stock would be suspended forthwith until information on the purported divestment is made available to the Nigerian Stock Exchange.

At the opening of trading yesterday on the Exchange, the company’s stock was not traded, indicating that the suspension may have taken effect immediately.

The price of the stock had closed last Friday at N290 per share, down from N300 per share at which it opened for trading.

Speaking yesterday on the floor, the Head of Information and Control of NSE, Mr. Kene Okafor said the Exchange took this decision, owing to allege contravention by Chevron Nigeria to brief the regulatory authorities, the exit from the company of its foreign partner who owns 60 per cent of its total holding.

He added that the NSE took the pro active action in order to prevent investors investment in the company as the issue of diversement may have negative effect on its share price.

He noted that the suspension would be lifted if the company formerly approaches the Exchange to explain in details the situation of things.

A stockbroker, who spoke with The Guardian on the condition of anonymity, said Chevron action on the diversement issue contravene the laid down principle of operation of a quoted company in the corporate world.

He said Chevron Nigeria was at the verge of transferring its shares and did not do what they ought to do as a quoted company, noting that they are suppose to get clearance from the NSE before embarking on such diversement of shares.

“They are already in the verge of transferring but they did not do what they are supposed to do as a quoted company. They are suppose to get clearance of such material information from stock exchange before they do so. It happened that they try to sell and transfer without clearing and notifying the NSE.

“After the suspension, if they eventually clear with the authority and they are satisfied, of course they will lift the suspension,” he said.

Tuesday, April 22, 2008

Divestment plan: Exchange places Chevron on full suspension

FOLLOWING plans by Chevron Corporation USA to divert its holding from Chevron Oil Nigeria Plc, the Nigerian Stock Exchange’s management yesterday placed the company’s stock on full suspension.

With the development, trading on the company’s stock would be suspended forthwith until information on the purported divestment is made available to the Nigerian Stock Exchange.

At the opening of trading yesterday on the Exchange, the company’s stock was not traded, indicating that the suspension may have taken effect immediately.

The price of the stock had closed last Friday at N290 per share, down from N300 per share at which it opened for trading.

Speaking yesterday on the floor, the Head of Information and Control of NSE, Mr. Kene Okafor said the Exchange took this decision, owing to allege contravention by Chevron Nigeria to brief the regulatory authorities, the exit from the company of its foreign partner who owns 60 per cent of its total holding.

He added that the NSE took the pro active action in order to prevent investors investment in the company as the issue of diversement may have negative effect on its share price.

He noted that the suspension would be lifted if the company formerly approaches the Exchange to explain in details the situation of things.

A stockbroker, who spoke with The Guardian on the condition of anonymity, said Chevron action on the diversement issue contravene the laid down principle of operation of a quoted company in the corporate world.

He said Chevron Nigeria was at the verge of transferring its shares and did not do what they ought to do as a quoted company, noting that they are suppose to get clearance from the NSE before embarking on such diversement of shares.

“They are already in the verge of transferring but they did not do what they are supposed to do as a quoted company. They are suppose to get clearance of such material information from stock exchange before they do so. It happened that they try to sell and transfer without clearing and notifying the NSE.

“After the suspension, if they eventually clear with the authority and they are satisfied, of course they will lift the suspension,” he said.

This notice was published on page 34 of The Punch, Wednesday, April 16, 2008. Requesting that all bulkpost ventures and NIPOST offices nationwide return all undelivered share certificates and return money warrants relating to the above companies and bank respective offers.

In the same vein, the Registrars are urging investors into these companies and bank who are yet to receive same to contact the Registrar on the second floor of A.G Leventis Building 42/43 Marina, Lagos; with the following telephone numbers 234 (01) 7732181 and 2666778.

Though as at the time of filling in this report, Proshare NI without prejudice made attempts to call these numbers, but could not get through. It was also observed that no e-mail or mobile telephone numbers were published for concerned investors to reach the Registrar.

Prior to this time, Proshare NI had earlier written a story on April 15, 2008 and posted it on its website on how investors have been groaning over the issue of non received share certificates and return money; especially that of Access Bank as Wema Registrars was yet to conclude dispatch of certificates and return money.

However, no dividend would be given to investors for the 2008 financial year end, but a bonus is likely to go to them. “The market is bonus driven, no matter the amount of dividend, shrewd investors would want an increase in the number of units they are having in a company” Udochukwu said.

He affirms that Leadstone is not raising fresh funds to compete in numbers, but to take investment to the grass-root. “The grass-root people are the people to make the market interesting” he said.

“The best way to make money in the capital market is to take the business idea to the grass root members of the Nigerian society” he noted.

Udochukwu further confirmed to Proshare NI that any investor that buys into the company before the end of the placement would be given a 100 percent allotment.

He also confirmed to Proshare NI that the purpose of the placement is to enable Leadstone Investment raise capital to meet the company’s strategic vision and objective of building a viable business enterprise with interest in different sectors of the economy.

These include the Oil and Gas, Real Estate, Stock broking and a football Academy for football development and marketing of players to both local and foreign clubs.

Leadstone Investment is seeking to raise N1.9 billion by offering to investors 2,000,000,000 ordinary shares of 50 Kobo each at 95 Kobo per share. The placement which has since opened on March 31, 2008 would close May 09, 2008.–ProshareNG

Balogun made this call while presenting his bank‘s, ”Fact behind Figures” on the floor of the NSE in Lagos on Wednesday.

The managing director pointed out that as more investors become aware of the returns on investment and stability of the Nigerian stock market, international interest would heighten.

”Therefore, we shall see the market getting more robust and well managed quoted companies would continue to do well. If you look at the billions of dollars that come into Nigeria, in my view today, there still few listed companies and entrepreneurs who are driving businesses for the amount of money that come into the market.

”That is why I would encourage firms not listed to consider doing so to benefit from the investment flow into the country,” Balogun said.

According to him, the fundamentals that were driving the economy were still very strong and were being propelled by the banking sector.

He added, ”We have recently seen a rise in the monetary policy rate, we have seen that inflation is coming under some pressure and we have seen that the government will continue to make sure that the exchange rate remains strong.

”Naturally, now that most banks are very liquid, when interest rate rises, banking net interest margin are supposed to rise. We believe the interest rate would remain fairly high in the foreseeable future. We also expect that the naira would continue to appreciate, to about N110 to the dollar, by the end of this calendar year.”

He disclosed that his bank was in the final stage of receiving regulatory approval for a 25 per cent investment in one of the pension funds administrators in the country.

Balogun also revealed that his bank would soon inaugurate a pan African Hedge Fund with an international hedge fund manager, based in the United States.

He explained, ”The fund would invest 60 per cent of its fund in Africa and about 40 per cent in the Middle East. For transaction banking technology alone, we are investing over N700m in technology, to launch a new platform for transaction banking in October 2008.”–punch

The company recorded a profit after tax of N21.4bn on a turnover of N80.6bn and has already declared N17bn as dividend for the 2007 financial year.

Sule said in a statement on Thursday in Lagos that the performance was testimony to the quality of its products and wide acceptance by the public.

He added that the company would continue to take innovative measures geared towards achieving consistent growth.

He pointed out that Dangote Sugar Refinery was the only sugar refinery in West Africa and the second largest in the world – second only to the one in Dubai.

He added, ”Our refinery is equipped with a system called Iron Exchange Resin – a new technology of refining sugar designed by the Tate and Lyle of the United Kingdom, which is a renowned sugar producer worldwide.

We are currently the only refinery in the whole of Africa that has the IER system. With that we are able to refine the best quality of sugar that you can obtain.”

Speaking on the planned expansion drive of the company, He said, ”We are in the process of expanding the sugar refinery to 2.5 million metric tonnes from 1.2 million MT per annum, thereby making us the largest sugar refinery worldwide.

He said that the location of the refinery at the Lagos port was to a huge advantage as the company was making significant savings on logistics costs as well as reductions in wastages and pilfering.

He said, ”We are importing our raw sugar straight from Santos in Brazil to Apapa that only 12 days sailing, which means we save a lot of money. We have dedicated jetties in this sugar refinery. There is no other refinery that is being built today that has dedicated jetties. So, these are all the advantages that we already have.

”More importantly, the Dangote Sugar business started in 1978, so it is a business that is already entrenched; it is a business that is already well established. It is actually going to grow from there, not dwindle.

He revealed that the company was already looking beyond Nigeria in its expansion drive and that thre company was in the process of establishing a one million metric tonne in Algeria, and had started exports to Ghana and Senegal.–punch

Jegede, who explained this in an interview with newsmen, however, said that the certificates that had been approved by the regulator had been dispatched to its shareholders.

He explained, “If any shareholder has not received his certificates, it is because we are constrained by the allotment process, we are also on the neck of registrars to make sure that all investors get their share certificate.

Jegede reiterated his promise of dividends by the end of this financial year, noting that payment of dividends was not an assurance that the company was going to declare bonus yearly.

“If we are going to return money, it is going to be less than 10 per cent of the total money raised and with what we have seen from those that have been approved so far, only little money would be returned,” he added.

According to him, quoted on the stock Exchange had availed his company, the opportunity to raise capital and has also positioned it as a serious enterprise.

He stated that the faithful implementation of the contents of 2008 budget would boost growth in the maritime sector.

Jegede, who was among Nigerians awarded the year 2008 role model, by the “We are the future of our nation” on Tuesday added, that “The major challenge faced by the maritime sector today is that of infrastructure and the inability to fully implement the Cabotage law.

That law is what is needed to strengthen the industry and expose indigenous operators to opportunities in the industry.”–punch

Similarly, Profit before Tax (PBT) rose by 41.38% from N555.9million to N786million. Following the same progression, Profit after Tax (PAT) increased from N434.1million to N589.9million, showing a remarkable growth of 36% over 2006 figures.

The company rewarded its shareholders with a dividend of 30kobo per 50kobo ordinary share. Also, the Board of Directors is proposing for shareholders’ approval at the AGM on May 9 a bonus issue of one for eight, meaning shareholders will get one additional unit of NAHCo share for every eight units they currently hold. Mr. Bates Sarki Sule, NAHCo’s Managing Director/Chief Executive Officer, said he was happy that the company’s operating results in the year under review witnessed general improvements in all areas and that all the indices of growth moved upward.

According to him, NAHCo has become the typical success story of the Federal Government’s privatization programme. He added that the Company has witnessed a significant turnaround since 2005 when it was privatized with a new Management in place. He disclosed that the Company has invested over US$7million in equipment acquisition, service automation, and managerial capacity building in the last two years.

Ambassador Patrick Dele-Cole, NAHCo Chairman, said despite the challenging Nigerian operating environment, NAHCo remains a force to reckon with in the ground handling business. His words: “The future of our Company is indeed bright. The Board will continue to support Management in its bid to fully re-position NAHCo. We will continue to invest and pursue opportunities in areas that will improve our profitability and revenue base to create superior value for our shareholders, customers and our employees. The Company is being restructured and repositioned for emerging challenges arising from the direct and indirect arrival of new ground handling Companies on the scene”.

NAHCo’s Public Offer floated in September 2007, was subscribed by 678%, meaning that the Company got almost 10 times more money than it wanted. The excess has been returned to investors with interest. The gross offer proceeds of over N2billion will be used for business development, service and process automation, re-branding, and equipment acquisition. It was indeed a successful 2007 for NAHCo as the Company won the President’s Merit Award of the Nigerian Stock Exchange and was also admitted into aviance, the first ever international alliance of airport service providers. It also won new businesses which led to opening of new stations in Calabar, Jos, and Enugu.

NAHCo operated for 26 years as a partially owned government company. Government’s 60% stake, held on its behalf by the Federal Airports Authority of Nigeria (FAAN), was sold in 2005 through an Initial Public Offer (IPO) which was over-subscribed. The company’s shares were subsequently listed on the Secondary Market of the Stock Exchange on 27 November, 2006.

Nigerian Bags Manufacturing Company Plc, (BAGCO), has listed shares worth N17.0 billion on the floors of the Nigerian Stock Exchange. Peter Lou, Managing Director (MD) of the company confirmed this to Proshare NI today in Lagos Nigeria at the floors of the Nigerian Stock Exchange (NSE).

This figure amounts to 4.350 billion ordinary shares of 50 Kobo each at N3.90 Kobo per share.

Lou, as at the time of filling in this report could not give further details on the shares of his company listed or furnish the current financial position of BAGCO to Proshare NI. “As chief Ukpabi said in the IPO document that is all the details” he said.

Binos Yaroe, General Manager (GM)/Head, Quotations and Listing at the NSE who represented Professor Ndi Okereke-Onyiuke, Director General (DG) of the exchange confirmed to investors that the company is not listing only shares it offered for sale during the its IPO.

“They are listing 4.350 billion units total shareholding, offer for sale precludes supplementary shares, if it were public offer, it would be an opportunity for the company to retain 25 percent of its oversubscription” Yaroe said.

Prior to this time Nigerian Bags came to the market to raise fresh funds by offering to members of the investing public 1.865 billion ordinary shares of 50 Kobo at N3.90 Kobo per share; which was about 700 percent oversubscribed. A statement Emmanuel Ukpabi, Vice Chairman (VC) of company confirmed to Proshare NI.

In the same vein, Bunmi Oguntoye, Registrar/Chief Executive Officer (CEO) of Meristem Registrars Limited, Registrars to the offer confirmed to Proshare NI at the Stock Exchange that the total amount of returned money to investors was worth N13.0 billion.

“We have returned the money to investors and the ones you can find with us, is for those who gave us instruction that they will come and collect it on their own” he said.—ProshareNG