NGX upbeat as gains in Geregu, others lift indices by N204b

•Tasks new administration on growth policies, NNPC IPO
Transactions on the equities sector of the Nigerian Exchange Limited (NGX) reopened in an upbeat yesterday, as heavy price gains in Geregu and 41 stocks lifted capitalisation by N204 billion.

Yesterday, market capitalisation of listed equities appreciated by 0.59 per cent to N34.273 trillion from N34.069 trillion reported on Friday. The NGX All Share Index also went up by 373.62 basis points to 62943.35 points from 62569.73 points reported on Friday.

Indeed, yesterday’s upturn was propelled by gains in large Geregu, FBN Holdings, Unilever, Zenith, Ecobank TransNational Incorporated, United Bank for Africa and United Capital.

Analysts at Vetiva Dealings and Brokerage said: “The market saw recoveries in the banking sector, while consumer goods continue to suffer losses on the back of the high inflationary environment. We expect another mixed trading session tomorrow, while the share buy-back activity in Dangote Cement contribute significantly to market turnover.”

On the price movement chart, 42 stocks appreciated in price, while 28 constituted the losers chart. Daar Communication, Unilever Nigeria Plc and Fidelity Bank led gainers chart, adding 10 per cent each to close at 33 kobo, N15.95 kobo and N7.37 kobo respectively. Sterling Bank followed with a gain of 9.97 per cent to close at N3.42 per unit; JohnHolt recorded an increase of 9.94 per cent to close at N1.99 per unit. Wema Bank gained 9.88 per cent to close at N4.45 kobo. Ecobank TransNational Incorporated added 9.84 per cent to close at N13.95 kobo. Champion Breweries appreciated by 9.84 per cent to close at N13.95 kobo. FBN Holdings garnered 9.81 per cent to close at N17.35 kobo. Redstar Express also increased by 9.72 per cent to close at N3.50 kobo.

On the contrary, PZ Cusson, Veritas Kapital, Union Bank of Nigeria and SFS REIT topped losers chart on percentage terms, shedding 10 per cent to close at N16.20 kobo, 27 kobo, N6.30 kobo and N69.30 kobo respectively. FTNCocoa trailed with 9.93 per cent to close at N2.54 kobo.

Eternaoil depreciated by 9.84 per cent to close at N23.70 kobo while Northern Nigeria Flourmills dropped 9.78 per cent to close at N12.45 kobo. JapaulGild lost 9.09 per cent to close at 90 kobo. RTBriscoe shed 8.47 per cent to close at 54 kobo. Omatek dropped 8.16 per cent to close at 45 kobo.

May&Baker also lost 7.92 per cent to close at N5.

Volume of shares increased during the day as investors traded 710.018 million shares valued at N13.829 billion in 8979 deals against 600.487 million shares worth N8.827 billion exchanged hands the previous day in 9554 deals.

Transactions in the shares of Sterling Bank led market activities during the day with account of 65.948 million shares valued at N216.572 million, Transnational Corporation of Nigeria followed with account of 62.200 million shares valued, Unity Bank traded 59.665 million shares worth N79.965 million, AccessCorp exchanged 51.054 million shares valued at N828.767 million while Universal insurance traded 49.806 million shares worth N12.338 million.

Meanwhile, NGX Group also stressed the need for government to focus more on policies that would boost liquidity and make the market-friendly for investors.

Besides, the group also expressed optimism that President Bola Ahmed Tinubu administration would fast-track the planned Initial Public Offer (IPO) of the NNPC Limited.

At the group’s 62nd yearly general meeting held in Lagos at the weekend, Group Chairman, NGX Group, Umaru Kwairanga, stated that the Federal Government needs to implement market-friendly policies that would engender consistent growth in the market and make businesses thrive in Nigeria.

Shareholders approved all resolutions on the agenda, which included the appointment of six directors of Nigerian Exchange Group Plc: Nonso Okpala (Non-Executive Director), Sehinde Adenagbe (Non-Executive Director), Ademola Babarinde (Non-Executive Director), Mosun Belo-Olusoga (Independent Non-Executive Director), Mohammed Garuba (Non-Executive Director) and Fatima Wali- Abdurraham (Independent Non-Executive Director).

Kwairanga added that the group is hopeful that the planned Initial Public Offer (IPO) of the NNPC Limited will be fast-tracked by the Tinubu-led administration.

There has been a clarion call for multinationals in the telecoms, and oil and gas companies to list on the nation’s bourse, to deepen the market and encourage active participation of indigenous consumers in the companies’ wealth creation process.

It is not heartwarming to say that the Nigerian capital market, relative to the size of the country’s economy, is still abysmally low, as the market capitalisation to GDP ratio stands far below 20 per cent, in contrast to South Africa’s 348.3 per cent and Brazil’s 68.4 per cent.

The ratios in the key developed economies are more than 100 per cent. The participation of Nigerians in the capital market is very low. Less than five per cent of the country’s population are involved in the market as investors, while less than one per cent of registered companies are listed.

This is despite various initiatives put in place by the regulators to restore investors’ confidence and attract more issuers to the market.

Notably among them is the establishment of the National Investors Protection Fund, to cushion the adverse effect of losses suffered in the capital market, the e-dividend policy designed to minimise cases of unclaimed dividends.

The regulators have provided issuers and investors with a responsive, fair and efficient securities market, using cutting-edge technology, and providing local and foreign investors access to the Nigerian securities market in an environment of a strong regulatory framework and reliable trading and settlement systems.

The NGX currently has a more attractive portfolio of services and products, although investors have maintained a strong appetite for equities.

Experts have argued that investors’ confidence in the market would remain low until the government focused more on policies that would boost liquidity and make the market thrive for both local and foreign investors.

According to Kwairanga, the group is open to working with the Federal government, as well as stakeholders towards improving the country’s credit profile and creating a favorable environment for both domestic and foreign investors.

He lauded President Tinubu-led administration for the various reforms that have resulted in the impressive performance witnessed in the market in the past few months.

“The capital market community is excited by the new government and the steps it has so far taken concerning the economy as reflected in the tremendous growth in our market indicators.

“As a group, we are committed to working with the government to stimulate further growth in the economy, address higher capital costs, as this will go a long way to enhance Nigeria’s credit profile, and create a favourable environment for both domestic and foreign investors”, he said.

Speaking on the performance of the group, Kwairanga noted that NGX Group demonstrated resilience in 2022, achieving a 10.3 per cent increase in gross earnings to N7.5 billion, despite a challenging economic environment.

The group’s total revenue grew primarily due to a 6.8 per cent increase in revenue to N6.2 billion, and a 30.1 per cent increase in other income to N1.3 billion.

According to him, revenue growth was further bolstered by a 51.2 per cent increase in treasury investment income and 9.0 per cent rise in transaction fees.
However, its total expenses rose by 35.5 per cent to N8.8 billion, primarily due to interest costs on borrowed funds used for strategic acquisitions.

While welcoming the new board members, Kwairanga also commended the contributions of the outgoing board members to the growth and development of the organisation.

He said: “Achieving an efficient capital mix and broadening our access to capital remain fundamental to our mission. The board will continue to assist the management team in addressing long-term risks, strengthening the global NGX brand, and assessing progress toward our goal of being Africa’s preferred exchange hub.”

Meanwhile, NGX has announced plans to design fiscal-type incentives that would attract more listings and boost investment in the nation’s bourse.

Besides the exchange also announced plans to interface with the government in the form of advocacy to find ways of tackling the myriads of challenges facing quoted companies.

Chief Executive Officer, NGX, Temi Popoola, while speaking during the Closing Gong Ceremony held in honour of the new Chief Executive Officer, Dangote Cement Plc, Arvind Pathak, on Wednesday, noted that Nigeria is one of the few geographies where a listed company can barely point at any tangible fiscal thing that they enjoy by being listed.

According to him, the exchange would also strengthen step-up engagement with corporates to identify perennial issues constituting disincentive to investment in the market.

“Currently, we are working through a plan tagged ‘fiscal-type incentives for listed corporates’ as Nigeria is one of the few geographies where a listed company can barely point at any tangible fiscal thing that they enjoy by being listed. We will also be engaging corporates to further identify their pain points and amplify that with the government.”

Popoola attributed the staggering growth of the Nigerian capital market recently to increased focus, emphasis on regulation and the return of investors’ confidence in the market due to the policies implemented by the new government.

Also, Popoola pointed out that raising capital for small businesses and corporates would help unlock capital and accelerate wealth creation, stressing the need to leverage retail investment in efforts to deepen the market, and grow Nigeria’s economy,

“It is very clear that the government needs as much support as it can get. So, we are working with all stakeholders: the SEC, other exchanges, just across the market to address key challenges around wealth creation and revenue generation.

He commended the performance of Dangote Cement Plc in its 2022 financial numbers and stated that the Exchange is keen to continue working with more stakeholders in the industry.

Responding, Pathak expressed optimism about the firm’s growth, considering the giant strides the firm has made in the nation’s debt capital market.

The new CEO said the company is looking forward to fostering partnership with the exchange, especially in the areas of promoting the growth of the Nigerian capital market, while providing additional value to its shareholders.