News

NSE approves three new issues to deepen market – Punch



In order to further deepen activities in the capital market, the Council of the Nigerian Stock Exchange, through its Quotation Committee, has approved three new issues.

A statement from the NSE on Wednesday said that the issues, which were approved at a meeting on Monday, were for an Infrastructure Development Bond, a Rights Issue and a Special Placing. It noted that the Niger State Government’s got approval for an offer for subscription of N9bn at 14 per cent fixed rates redeemable infrastructure Development Bond of between 2011 and 2018 of 1,000 each at par. It added that the repayment of the principal had been fixed semi-annually along with coupon on each payment date, while the stockbroker was BGL Securities Limited.

The statement also added that the NSE Council approved Flour Mills of Nigeria Plc’s Rights Issue of 455,566,222 shares of 50 kobo each at N62.00 per share. “The proceeds of the issue would be used on expansion of food business; expansion of agro-allied business; and developing of new corporate office, among others,” it stated.

According to the statement, Studio Press Nigeria Plc, got approval for a Special Placing of 252,104,285 Ordinary Shares of 50kobo each at N1.40 per share. “The placing is being undertaken to enable the company allot Ordinary Shares of 252,104,285 Units at N1.40 to Federated Resources Nigeria as a result of its injection of N352,945,999 as deposit for shares in 2008,” it said.

The statement also noted that the delisting of Nigerian Bottling Company Plc from the Daily Official List of The Exchange was also considered, adding that the stockbroker was RenCap Securities (Nigeria) Limited.



Pension fund investments in stocks hit N60bn – Punch



Pension Fund Administrators, under the regulation of the National Pension Commission, increased their investments in the stock market from N36.79bn in 2009 to N60.09bn in 2010. The Director-General, PenCom, Mr. Muhammad Ahmad, who confirmed this in an interview with our correspondent on Wednesday, said the capital market remained an important investment area for the growing pension funds. He said, “The capital market that represents one of the platforms for investing pension funds witnessed improved performance in 2010 compared to the performance in 2009 as shown by improvement in some stock market indicators. “For example, the All Share Index increased by 18.93 per cent, which moved pension fund investments in equities from N36.79bn in 2009 to N60.09bn in 2010 due to improved valuations and additional placements.” However, as the capital market records continuous drop in shares value, the PenCom boss said the commission had no plan to issue any directive to the PFAs to halt investment of funds in the market. According to him, the current drop in share prices will not have any adverse effect on the funds. Ahmad said, “The commission is not planning to issue any regulation to PFAs to stop investment in the stock market because of the continuous drop in share prices. Pension fund business is a long- term one. Study has shown that equities have posted more returns than other classes of assets.” According to him, pension fund investment is expected to be done using a long- term approach because it is not a speculative business.



Recapitalisation: Court grants FinBank approval to hold EGM – Punch



A Federal High Court, sitting in Lagos, has granted FinBank Plc an approval to convene a meeting of its shareholders in order to take a decision on its recapitalisation plan. A statement by the bank on Wednesday said that the court ordered meeting, which would hold in Abuja was for the bank’s shareholders to consider, and if thought fit, approve the Scheme of Arrangement between the bank and the holders of its fully paid ordinary shares. The statement said, “At the said meeting, the bank’s shareholders will be expected to pass as special resolutions approving that the issued share capital of the bank be reduced from N8,360,599,735 to zero by the cancellation of 16,721,199,469 issued and fully paid ordinary shares of the bank, in consideration of which the shareholders shall receive cash or be issued, allotted and credited as fully paid, ordinary shares in the share capital of First City Monument Bank Plc.” Also for approval is a resolution that the unissued share capital of the bank comprising 4,278,800,531 ordinary shares of 50kobo each be issued and allotted to Asset Management Corporation of Nigeria in consideration for the injection by AMCON of such amount of bonds required to take the bank to a net asset value of zero.



Govt Dumps Oji River Power Plant – Thisday



The Federal Government yesterday said it would not commit further funds to the revival of the moribund Oji River hydro-power plant located in Enugu state. Minister of Power, Prof. Barth Nnaji, stated that government had in its desire to prioritise its developmental agenda, discarded any plans or suggestions to finance the revival of the power plant, and would rather concentrate its efforts on the construction and commissioning of a new 1000 megawatts (MW) coal-fired power plant in Enugu. Nnaji, while explaining ongoing efforts and worthwhile achievements in the power sector within the last 100 days of President Goodluck Jonathan’s administration, said in Abuja: “We would not invest any more money in reviving Oji River power plant because the plant generates just about 35MW considering that its water level has drastically gone down such that it cannot power its turbines to generate electricity.

“The plant is obsolete and we would not commit funds in such obsolete plant.” He explained that Oji River was no longer as forceful as it used to be years back, adding, "So you do not have enough water to power the turbines and that is a serious problem because when you look at the water level of the rivers in this area before, you will discover that they no longer have the same kind of force and that is the very unfortunate situation with Oji River.” The minister noted that government was also committed to diversifying Nigeria’s energy mix with the scheduled delivery of three 1000MW coal-fired plants in Enugu, Gombe and Kogi states upon conclusion of the re-evaluation of coal reserves in the country to establish bankable data for investment in the sector.



NITEL: FG Brainstorms on Globacom’s Offer – Thisday



The Federal Government might have considered Globacom’s bid to acquire the Nigerian Telecommunications Limited (NITEL) through the willing buyer, willing seller option. THISDAY gathered that the government favoured Globacom because of its experience, clout and reach. The belief is that Globacom will not just to acquire NITEL, but also to turn around the ailing entity. The President was said to have been persuaded that two years after the commencement of GSM in the country, Globacom was able to swing the pedulum in telecoms sector by coming from behind to grab the number two position today. The decision to give it to Globacom despite the fact that some other firms like Brymedia, the third place bid winner of the terminated bid and other firms were offering double what Globacom is offerings was because it will turn the ailing entity around for the benefit of Nigerians. Though the federal government is said to have invited some interested firms to a negotiation table for NITEL, it has its radar on Globacom. The fact that the Mike Adenuga-led Globacom had performed a feat in the telecoms sector by taking Glo to such a height, is an attractive option the federal government is willing to adopt to sort out the NITEL crisis once and for all. Another factor that helped Globacom’s case is the fact that the other companies that participated in the bid and offered huge amounts could not pay what they offered. The fear in government quarters is that if these firms are having difficulties in paying to acquire NITEL, they will be able to turn it around.



Etisalat opens talks with Helios to buy multi-link Telkom - Businessday



Etisalat, the UAE-owned mobile phone company and owner of Etisalat Nigeria , has opened new negotiations with Helios to buy Multi-Links, the CDMA network operator that has been at the centre of intense take-over bids. Before the latest move, Etisalat had been linked to talks with Telkom of South Africa to buy stakes in Multi-Links, when it was reported in December to have launched an offer for 80 per cent stakes in the Nigerian CDMA operator, which was at the time owned 100 per cent by the South African telecoms company. While Telkom was reported to have rejected the offer, talks were said to be underway, in what could have ended up as a possible merger or sale transaction. People conversant with the situation told Technology Times that Etisalat has now turned to Helios and talks have gone ahead between the two parties that may result in the acquisition of stakes in Multi-Links. Etisalat, which is Nigeria ’s fifth GSM network operator and the market’s last entrant, hopes the acquisition will deepen its market strength.



CBN may raise interest rate if inflation not below 10% . – Businessday



Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, has said policy makers are ready to keep raising interest rates if inflation fails to remain below 10 percent. Sanusi said the CBN was “not celebrating yet” after inflation eased to 9.4 percent in July, the slowest pace in more than three years. The bank is still concerned about “stubbornly high” core inflation, Sanusi said in an interview in Hong Kong yesterday. “I would like to wait and see if the drop is sustainable or a blip,” he said. “We’ll wait to see if it’s a trend. If it isn’t a trend, we may have to continue tightening.” Turkey, Brazil and some other central banks have cut lending rates in the past month, concerned about Europe ’s debt crisis and slowing global growth. Sanusi’s comments underscore how Nigerian policy makers are committed to keeping a lid on inflation, which has averaged about 11 percent since the start of 2007. “We certainly are determined to show inflation does not get out of control,” Sanusi said. The country’s benchmark rate has been increased four times this year, to 8.75 percent to rein in inflation and support the naira. Inflation data for August, which is due to be published next week, may be little changed from July, remaining slightly below 10 percent, Sanusi said.



Power projects for 4,000mw 80% completed, says minister – Nation



The Minister of Communication, Labaran Maku, has said all power projects that will give the country over 4,000 mega watts electricity have reached 80 per cent completion stage. Maku, who briefed the press after the Federal Executive Council (FEC)meeting, yesterday in Abuja, said what is left, is for the government to arrange for the supply of gas to the power stations. The Minister, who echoed the findings of the Presidential Project Monitoring Committee in its submission to the FEC, said what is urgently needed, is for the government to work urgently on gas supply. The leader of the Presidential Project Monitoring Committee, Ibrahim Bunu, said it has recommended that works on all uncompleted dams be completed to enable the country derive maximum benefit from the sector, adding that proper utilisation of the dams would also help in solving the power problems in the country.