Get all the latest information on businesses and companies in Nigerian Stock Exchange.

As part of efforts to restore investor confidence in the stock market, the Federal Government announce the following steps:

1. NSE with effects from Wednesday, August 27, 2008 (today) will reduce its fees by 50 percent.
2. Stabilization fund will be established with its modalities to be worked out very soon.
3. The Office of the attorney general of the federation has been directed to issue an exemption to the provision of the relevant sections of the company and allied matter act, 1990 on share buy backs to permit quoted companies buy up to 20 percent of their shares.
4. Banks were also advised to restructure existing credit facilities extended to market players to allow for longer repayment periods.
5. CBN is also taking appropriate measures to review the liquidity situation in the economy and appropriate measures to improve the liquidity in the system if required.
6. NSE is also taking steps to review its trading rules and regulations. In the interim, effective from today; one per cent maximum downward limit on daily price movement whilst the current five percent limit on upward movement is retained.
7. SEC will also release guidelines for market makers on the NSE before the end of the week and delist moribund companies earlier advertised.
8. There will be strict enforcement of NSE listing requirement with zero tolerance for infractions.
9. Nigerian banks will also partner with market maker to inject fund into the capital market through appropriate structured credit facilities.

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Thanks to CSL, SBA and UBA Capital, here are the major news stories over the week:

1. Nigeria’s crude oil production for July 2008 was 1.9mn barrels daily.
2. Union Homes Reit to provide investors alternative investment outlets: Union Homes Hybrid Real Estate Investment Trust (Reit) will provide alternative investment outlets for long-term investors in the Nigerian capital market. Mr. Abayomi Sanya, managing director of Goldman Asset Limited, the issuing house to the on-going Union Homes Hybrid Reit said that worldwide, Reit has proved to be one of the most reliable medium to long term investments because of its inherent qualities and unique features. Union Homes Savings and Loans Plc, the fund manager of the Reit is raising N50 billion through an offer for subscription of 970.9 million units of N50.00 each at N51.50 per unit in the Union Homes Hybrid Reit.
3. New EU agriculture policy threatens livelihood of 10 million Nigerians: At least 10 millions Nigerians and their dependants representing about 6.7 percent of the nation’s population who live on cocoa are due for the labour market if the ministry of agriculture and water resources continues to pretend not to have been informed officially or otherwise of the new Maximum Residue Limits (MRLs), on agricultural commodities by the European Union (EU) which comes into effect from September 1, 2008.
4. Virgin Atlantic, the technical partner to Virgin Nigeria (Nigeria’s flag carrier) is currently considering plans to sell its 49% stake in Virgin Nigeria. The company is currently in talks with likely buyers. However, there is no official reason for the sale yet.
5. Multinational oil-trading companies have threatened to stop the importation of fuel for the Nigerian National Petroleum Corporation (NNPC) in protest against the application of unfavourable demurrage on imported fuel cargoes.
6. Lagos State Government has concluded plans to raise N275bn through the issuance of bonds at the Nigerian Capital Market over the last three years.
7. Zenith Bank has announced a change in its financial year-end from June 30 to September 30. The Bank had, last week, reported its 12-month (to June 30, 2008) with over N41bn as net profits.
8. ETI floats N295 billion first sub-regional IPO: Ecobank Transnational Incorporated (ETI) the pan-African bank, Monday floated a $2.5 billion first initial public offering (IPO) in the West African sub-region.
9. GT Bank commences operation in the United Kingdom: This makes GT Bank the first Nigerian new generation bank to operate as full-fledged commercial bank; licensed to operate corporate and Retail banking services in the UK.
10. CBN lists challenges to meeting economic targets: The Central Bank of Nigeria (CBN) has identified a number of constraints to the smooth implementation of the Financial System Strategy 2020 (FSS 2020) programme which seeks to drive rapid and sustainable growth of the nation’s economy.The CBN said corruption and inappropriate laws and regulations for the financial sector have continued to thwart its efforts to fully implement the FSS document.Professor Chuklwuma Soludo, Governor of the CBN, said other challenges include instability in the country’s macro-economy, depth of the banking sector and poor state of infrastructure. The Central Bank of Nigeria (CBN) is targeting single-digit inflation by year end. The regulator explained that food prices are expected to drop as the economy enters the harvest period in the months ahead. Inflation rate had, in June 2008, galloped to 12% compared with 9.7% in the preceding month (May, 2008).
11. Inflationary pressure intensifies, rises to 14 percent: Inflationary pressure on Nigeria’s economy is intensifying with rate of consumer price increases soaring to 14 percent in July in what analysts say is a steady response to the spiraling food prices, poor state of infrastructure that has in turn increased the cost of doing business and global rice in fuel prices.This is against 12 percent recorded in June, the National Bureau of Statistics (NBS) confirmed yesterday in its latest price statistics.“The year-on-year average consumer levels as at July 2008 rose by 14 percent. This was higher than 12 percent observed in June. The corresponding urban and rural indices by 12.9 percent and 14.5 percent respectively over the period, the Bureau noted.Since the beginning of the year, inflationary pressure on the economy has continued to mount, erasing governments hopes of retaining the figure at a single digit within the year.
12. CBN recalls suspended Wema Bank’s MD, to resume September.
13. Neimeth to raise N10 billion for expansion, new businesses: Neimeth International Pharmaceuticals plc is currently awaiting shareholders’ approval with a view to increase its authorized capital base by 1.2 billion shares and thereafter move to the capital market to raise N10 billion.If the shareholders concede to this idea and Neimeth scale all regulatory hurdles, the N10 billion is expected to be raised through a hybrid offer of rights issue of 3 billion shares and public offer of 7 billion shares.
14. Change of Service Chiefs in Military High Commission: The President of the federation has made a routine change in the military high command. This move is part of the administration strategic decision to strengthen the new administration.

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Here is JP Morgan’s Analysis of Nigerian Banks. I will add some comments and notes later.

JPM Nigerian Banks Research Report (83)

Update:
Here are my comments and summary of the article:

1. Believes that stocks in the banking sector are expensive on both an absolute basis and relative to emerging market peers. The believe that they are overvaluated up to about 56%.
2. Recommended an Overweight (BUY) position in GTB, Neutral (HOLD) on Zenith, Union Bank, and Oceanic, and Underweight (SELL) on Intercontinental, UBA, and First Bank.
3. Expect a return in the range of 27% for GTB to negative 40% for First Bank.
4. Believe that the banks are sufficiently capitalised to support strong EPS growth.
5. The continued vulnerability of smaller banks may pose systemic risks to the Nigerian banking system.

Are negative on the Nigerian banks for the following reasons:

1. Valuations appeared stretched.
2. Capital raising has been used to fund growth while internal growth capability is low.
3. Continued intensification of competition.
4. The risk of sharp increase in non-performing loans has increased as private sector credit increased 98% in 2007.
5. Earnings growth visiblity is low.
6. Growth has moved ahead of the risk capabilities of both the banks and regulator.
7. Growth opportunity in the retail market may take longer to realise than the market is presently expecting.
8. The stock market has been driven by a hot-house effect, movinig ahead of fundamentals.
9. Bank prices do not sufficiently reflect the difficulties imposed by a lack of infrastructure, high levels of systemic risk as well as general economic and political risk.

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Congratulations Dream Team IV.

This is the video of Osaze Odemwingie:

Osaze Peter Odemwingie goal vs Ivory Coast 2008

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Here are the main business news of the week courtesy of the Research and Analysis department of CSL Securities:
Nigeria Targets N696bn FDI in 2008
The Nigerian Investment Promotion Commission has assured that the country would rake in more than $6bn (about N696bn) in Foreign Direct Investments by the end of this Fiscal year. Nigeria has received a total FDI of $40bn (N4.6trn) from 1999 to 2006; averaging about $5bn per annum.

Government Estimates $3bn GDP from Ethanol Production
The Federal government is anticipating about N351bn as gross domestic product earning from the biofuel industry when it finally takes off in 2011. The country hopes to cultivate about 65,000 hectares of land for cassava, sugarcane and palm oil to produce about 10 million litres of ethanol annually, beginning from that year.

Government withdraws report on revenue allocation review
The Federal Government has withdrawn the report on the draft revenue allocation formula submitted to the National Assembly for approval last month.President Umaru Yar’ Adua in a letter addressed to Senate President David Mark who same on the floor yesterday gave no reasons for his decision to withdraw the report.The letter reads ion part, ‘I write to formally withdraw the report on the review of the revenue allocation formula which I had forwarded to the distinguished Senate of the Federal Republic of Nigeria for consideration’.However, it was gathered that the President decided to withdraw the report to enable him to amend some aspects of the formula, following discussions between the Presidency and the National Assembly on some of the provisions.

2008 budget amendment splits lawmakers
Hopes of early passage of the amendment proposed by President Umaru Yar’Adua on the N2.74 trillion 2008 budget dimmed yesterday as Senate differed with the House of Representatives on some of its recurrent and capital provisions.Though the two chambers passed an overall N2.647 trillion amended budget as against the N2.567 trillion proposed by the President, they however approved different allocations for some sub heads resulting in differences in total amended recurrent and capital budget.A look at the budget summary as passed by the two chambers shows that while the House passed N1.327 trillion for recurrent expenditure and N785.1 billion for capital expenditure. Also while the lower house passed N162.6 billion for statutory transfers, the Senate approved N162.5 billion for the same purpose.

Constitution amendment to address Niger Delta problem
Honourable Henry Dickson, former chairman of the House of Representatives committee on justice declared that the impending constitutional amendment would present the opportunity to solve the problem of the Niger Delta politically.Dickson, while interacting with newsmen also decried the military option adopted by the Federal Government to confront the activities of the militants in the region insisted that political solution remains the only viable option by addressing certain salient issues in the constitution during the process of the amendment.

Yar’ Adua appoints board for Fiscal Responsibility Commission
President Umaru Yar’ Adua forwarded the name of Alhaji Aliyu Yelwa and others to the Senate for confirmation as chairman and members of the Fiscal Responsibility Commission (FRC).He also sent the confirmation by the Senate the name of former head of state, Chief Ernest Shonekan and seven others as chairman and members of the board of Infrastructure Concession Regulatory Commission (ICRC).

Zenith Bank Posts Massive Results
Zenith Bank Plc today released its results for the financial year ended 30th June, 2008. Turnover increased by 66.83% to N158.294 billion, PBT also increased by 95.84% to N50.284 billion while PAT jumped by 118.54% to N41.040 billion. In spite of this impressive performance, the stock lost 13kobo and closed at N40.76.   While these numbers from Zenith Bank look very impressive, it should be noted that the figures released are un-audited; and there was no explanation for the release of a full year unaudited results.  It might probably be due to the recent reversal of CBN’s common year end convergence policy for Nigerian banks.  There is market hearsay that Zenith Bank might come up with a New Year end different from 30th June.

FG States Share N78bn Excess Crude Proceeds for July.
The three tires of government yesterday shared N78.71 billion from the Domestic Excess Crude Account to augment the shortfall in revenue generated in July. A communiqué signed by the Accountant General of the Federation, Ibrahim Dankwanbo, at the end of the Federation Accounts Allocations Committee (FAAC) meeting said revenue to the Federal Government suffered a decrease because of incessant attacks on oil installations by Niger Delta militants. The total revenue declared to be shared among the three tiers of government was N437.17 billion as against N450.59 billion distributed in June, showing a decrease of N13.42 billion or 2.98 percent.

FDI: Nigeria targets N696 billion in 2008
The Nigerian Investment Promotion Commission (NIPC) has assured that Nigeria would rake in more than $6 billion (about N696 billion) Foreign Direct Investment (FDI) by the end of the 2008 fiscal year. Mustapha Bello executive secretary of the NIPC said, that the quantum of FDI that Nigeria had got in the past few years has been very impressive, adding that the country got more than $5 billion in 2006.He continued to say that the turnover of investors at the commission’s One-stop Shop since March has hit 3000 with average record of 38 to 40 turnovers every week. He added that some of the investors came to visit while others have invested in the country and that by the end of the year, the turnover should be in the region of 30,000.

Sovereign bonds record N5 trillion
Federal Government bonds quoted on the Over-the-Counter (OTC) bond market soared above its 2007 full-year performance in July 2008 as investors staked more than N1 trillion on sovereign-backed fixed assets during the month.Investors staked N1.224 trillion on 1.22 billion bond units in 10,131 deals in July, which raised total turnover in the past seven months to N5.05 trillion on 4.95 billion bond units in 39,524 deals, representing an increase of more than 22 percent on aggregate turnover value of N4.13 trillion recorded for the whole of 2007.Sovereign bonds had recorded a turnover of n3.83 trillion on 3.734 billion units in 29,393 deals in the first half with average monthly turnover of about N638 billion on 622 million bond units in 4,899 deals.

The turnover value performance of the OTC bond market in the past seven months was 163 percent above turnover value in the equity segment, which had also recorded significant leap in value and volume of activities. Market analysts said investors were fleeing to sovereign bonds to hedge their risks against the background of sustained recession in the equity market. They pointed out that the nature of sovereign bonds as near risk-free assets with guaranteed returns made them to perfectly fit the need of many investors as hedging instruments. According to analysts, most fund managers were using bonds as hedging instruments against price volatility on the equity market with a view to ensuring uninterrupted stream of incomes that could sustain the resilience of their portfolios.

Banks introduce fresh charges on cash lodgements
Nigerian banks have introduced new charges on cash deposits made by their customers in what appears a veiled attempt to discourage cash transactions in the economy.In many of the banks, a new fee of 0.5 percent flat is charged on all cash lodgements of up to N1 million and above made in one day.While justifying the new fee which became effective in May this year, one of the banks remarked: “Nigeria remains a cash-driven society and the process of cash handling is time-consuming and costly, therefore it has become imperative to introduce a cash-handling fee of 0.5% flat on all cash lodgements of N1,000,000.00 and above in any day. This will enable us to recoup part of the processing and management fees for all cash lodgements with the CBN”.This new policy affects individual and corporate customers of the banks that have decided to add to the financial burden of their customers. Banking industry analysts see the fee as another veiled attempt by the involved banks to pinch money from their customers outside the conventional commission on turnover (COT) and routine charges on deposits.

Federal Government needs N12tr for infrastructure development
The Federal Government needs to invest $100 billion (about N11.7 trillion) in four critical areas of infrastructure in order to achieve Nigeria’s Vision 2020 agenda and the United Nations’ Millennium Development Goals (MDGs).Dr. Abraham Nwankwo, director-general of the Debt Management Office (DMO) said power would cost about $18 billion to $20 billion; rail tracks, $8 billion to $17 billion; roads, $14 billion and oil and gas, $60 billion. He continued to remark that these infrastructure and related investments are critical to the realization of 13 percent annual growth rate of gross domestic product (GDP) set by the government and for Nigeria to become one of the 20 largest economies in the world by 2020.
He said creation of the Nigeria Infrastructure Fund would be a step in the right direction, through which funds could be mobilized and deployed to address Nigeria’s huge infrastructure deficit.

Sanusi Succeeds Ajekigbe as First Bank MD
A major change of baton will, effective January 1, 2009 take place in Nigeria’s premier financial institution, FBN, as Mr Sanusi Lamido Sanusi, the Executive Director, Risk and Management Control, takes over from Mr. Jacobs Moyo Ajekigbe as Managing Director/Chief Executive of the bank. Mr Ajekigbe will be retiring from the Bank on December 31, 2008 after a meritorious career spanning over three decades in the Bank. This succession plan is in sync with First Bank’s corporate governance practice, as  Sanusi will be understudying Ajekigbe, with a view to assuming office in a seamless maner. As is well known, the bank’s corporate governance posture has won it much recpect and awards both locally and internationally.

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Here are some news headlines from Guardian Newspapers in the last 3 days:

Oceanic Bank opens office in Sao Tome

THE Oceanic Bank Plc in Sao Tome and Principe said that it would provide quality service to the business and investment community in the Atlantic Ocean country.

The bank’s Managing Director/Chief Executive in Sao Tome, Mr. Peter Nwankwo, told the News Agency of Nigeria (NAN) recently in Sao Tome that the branch was a subsidiary of the Oceanic Bank Group.

According to him, Nigeria and Sao Tome and Principe enjoyed special relations through the Joint Development Authority (JDA), which administered their common economic interests in the Joint Development Zone (JDZ) of the maritime boundary.

“We also want to assist the business community in STP and STP in Diaspora and other investment groups, including Nigerians to do business here.
“The bank is a one-stop-over supermarket in STP where we guarantee our financial services with high professionalism,” Nwankwo said.

He said that President Fradique Meneses and the CEO of the bank, Chief Cecilia Ibru, would inaugurate the branch jointly on Thursday.

Union Homes floats N50b REIT fund

AFRICA’S first Real Estate Investment Trust (REIT) fund has been floated by Union Homes Saving & Loans Plc, a subsidiary of Union Bank of Nigeria Plc. The Union Home REIT, is a closed-ended unit trust scheme that aims to achieve long-term capital appreciation of assets by investing in a portfolio of high-quality real estate and mortgage assets.

For its effective take-off, Goldman Assets Management Limited as financial adviser and lead arranger, alongside Union Capital Market Limited as joint issuing house is packaging an offer for public subscription of 970.9 million units of N51.50 each in the Union Homes REIT.

The fund manager would be Union Homes Saving and Loans Plc, and the fund would be quoted on the Nigerian Stock Exchange.

According to the prospectus, the funds would invest a minimum of 90 per cent of its assets in real estate and real estate related assets and a maximum of 10 per cent would be invested in quality money market instruments.

Already, the council of the Nigerian Stock Exchange has approved the admission of the 970.9 million units being offered for subscription on its daily official list, and the units qualify as securities in which trustees may invest under the Trustee Investment Act, Cap T22, laws of the Federation of Nigeria, 2004.
As a form of mandatory subscription, the sponsors of the Union Homes REIT will subscribe to 10 per cent of the total fund size as mandated by the Securities and Exchange Commission (SEC) rules and regulations guiding collective investment schemes.

Key features of the offer include a forecast cash distribution of N1.50 per unit invest in the 2009 financial year and N3.25 for zolo for initial investors. Also there is a yearly payout of dividend with the minimum payout fixed at 90 per cent according to the Chairman of Union Homes Saving & Loans Plc, Dr. Batholomew Ebong.

The offer opens on August 11 and closes on September 11, 2008

First Bank seeks licence for life assurance

The Managing Director and Chief Executive, FBN Insurance Brokers, Mr. Val Ojumah, who confirmed the bank’s entry said the bank’s interest is to use life assurance as an entry point to lift life insurance penetration in Nigeria which is very minimal.

AP floats N105 billion hybrid offering

TO expand its operational capacity, enhance working capital and upgrade its storage facilities, African Petroleum Plc (AP) has floated an hybrid offering to raise fresh N105 billion from the capital market.

Specifically, the company is offering by way of rights to existing shareholders, 262.93 billion ordinary shares of 50 kobo each at N230 per share on the basis of one new ordinary share for every three ordinary shares already held by existing shareholders as at February 20, 2008.

Besides, new investors would be able to participate through an offer for subscription of 199.1 million ordinary shares of 50 kobo each at N250 per share.

According to the prospectus, the purpose of the offer is to provide additional working capital, procure and upgrade existing storage facilities, lubricant plants and retail outlets.

Specifically, the lion share of 42.24 per cent or N44.3 billion would be expended on the construction of a refinery of 50,000 barrels per day capacity at Lekki Free Trade Zone, while another N23.8 billion or 22.7 per cent would be expended on market expansion, acquisition and construction of additional 350 modern service stations nationwide.

Increase in working capital will take N18.1 billion or 17.21 per cent, while construction of 120,000 metric tonnes PMS storage at Apapa, Lagos State with N5.76 billion or 5.49 per cent, among others.

Diamond Bank to expand operations to seven Francophone countries

DIAMOND Bank has completed arrangements for the establishment of seven banking branches in seven different Francophone speaking African countries.
The expansion and establishment of the operations was part of the bank’s “socio-economic responsibilities” and other services to be rendered to the people living in the African countries.

The expansionary branch network was to complement the ones in the French speaking countries of Senegal, Benin and Cote d’voire.

The bank, which has a capital base of over N30 billion, has already 160 branches in the country and other African countries. While the bank’s assets has also increased to over N1 trillion.

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A turnover of 3.11 billion shares worth N38.16 billion in 72,680 deals was recorded this week, in contrast to a total of 4.05 billion shares valued at N43.75 billion exchanged last week in 73,782 deals.

There were no transactions in the Federal Government Development Stocks, State Government Bonds and Industrial Loans/Preference Stocks sectors.

The Insurance subsector was the most active during the week (measured by turnover volume), with 1.3 billion shares worth N2.05 billion exchanged by investors in 10,433 deals. Volume in the Insurance subsector was largely driven by activity in the shares of Investment and Allied Assurance Plc. Trading in the shares of the Insurance
Company accounted for 811.8 million shares, representing 62.7% of the subsector’s turnover.

The Banking subsector, boosted by activity in the shares of First City Monument Bank Plc and Fidelity Bank Plc, followed on the week’s activity chart with a turnover of 1.2 billion shares valued at N24.65 billion in 37,592 deals.

Last week, the Insurance subsector led on the activity chart and was followed by the Banking subsector.

Price Movement:
The All-Share Index rose by 4.04% to close on Friday at 52,641.55. The market capitalization of the 209 First -Tier equities closed higher at N10.55 trillion.
Eighty (80) stocks appreciated in price during the week, higher than the nineteen (19) in the preceding week. Mobil Oil Nigeria Plc led on the gainers’ table with a gain of N33.80 to close at N254.00 per share while Julius Berger Nigeria Plc followed with N25.91 to close at N146.24 per share. Other price gainers in the Top 10 category include:
+ Flour Mills Nigeria Plc - N8.05
+ Unilever Nigeria Plc - N4.97
+ Benue Cement Company Plc - N4.85
+ Cadbury Nigeria Plc - N4.70
+ UACN Plc - N4.42
+ PZ Cussons Nigeria Plc - N4.13
+ Guinness Nigeria Plc - N4.00
+ UACN Property Development Co. Plc - N3.99

Twenty – Six (26) stocks depreciated in price during the week, lower than the ninety-two (92) in the preceding week. Three Petroleum (Marketing) Stocks led on the losers table. Chevron Oil Nigeria Plc led dropping by N46.05 to close at N213.76 per share while Oando Plc followed with a loss of N17.99 to close at N170.01 per share. Other price losers in the Top 10 category include:
- Total Nigeria Plc - N9.50
- Nig. Enamelware Plc . - N8.61
- Nestle Nigeria Plc - N4.24
- 7-Up Bottling Co. Plc - N2.58
- G Cappa Plc - N1.47
- PlatinumHabib Bank Plc - N1.46
- Neimeth International Pharmaceuticals Plc - N1.43
- Ashaka Cement Plc - N1.00

Two equity prices were adjusted for dividend as recommended by the Board of Directors. Access Bank Plc was adjusted for dividend of N0.65 per share while NEM Insurance Plc was adjusted for dividend of N0.05 per share.

COMPANY NEWS
CONOIL PLC: Audited result for the year ended 31st December 2007 shows Turnover of N86.85 billion as against N90.52 billion in 2006. Profit after tax stood at N2.6 billion compared with N2.81 billion in 2006. The Directors are recommending a dividend of N2.75 per share. The date of closure of register of members is August 4, 2008 while payment date is September 19, 2008.

PZ INDUSTRIES PLC: Audited result for the year ended 31st May 2008 shows Turnover of N65.94 billion as against N54.22 billion in 2007. Profit after tax, exceptional items and minority interest stood at N3.95 billion compared with profit after tax and minority interest of N3.51 billion in 2007. The Directors are recommending a dividend of N0.62 per share. The date of closure of register of members is August 25, 2008 while payment date is September 11, 2008.

CAPPA & D”ALBERTO PLC: Audited result for the year ended 31st December 2007. The Directors are recommending a dividend of N0.50 per share. The date of closure of register of members is October 2, 2008 while payment date would be advised later.

ASSOCIATED BUS COMPANY PLC: Audited result for the year ended 31st December 2007 shows Turnover of N3.13 billion as against N2.71 billion in 2006. Profit after tax stood at N141.25 million compared with N143.01 million in 2006. The Directors are recommending a dividend of N0.08 per share. The date of closure of register of members is August 7, 2008 while payment date is September 7, 2008.

ASO SAVINGS & LOANS PLC: Audited result for the year ended 31st March 2008 shows Gross Earnings of N7.1 billion as against N2 billion in 2007. Profit after tax stood at N1.1 billion compared with N276.62 million in 2007. The Directors are recommending a dividend of N0.05 per share. The date of closure of register of members is October 6, 2008 while payment date is October 24, 2008.

LASACO ASSURANCE PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N1.84 billion as against N1.6 billion in 2006. Profit after tax stood at N678.11 million compared with N171.35 million in 2006. The Directors are recommending a dividend of N0.08 per share. The date of closure of register of members is August 8, 2008 while payment date is September 4, 2008. The 28th Annual General Meeting (AGM) of shareholders is scheduled to hold on Thursday, September 4, 2008 by 11.00a.m. The venue would be advised later

ROYAL EXCHANGE ASSURANCE (NIG) PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N2.7 billion as against N2.14 billion in 2006. Profit after tax stood at N543.64 million compared with profit after tax and exceptional items of N178.71 million in 2006. The Directors are recommending a bonus of 1 for 10. The date of closure of register of members was June 30, 2008.

GREAT NIGERIA INSURANCE PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N608.04 million as against N289.74 million in 2006. Profit after tax stood at N90.25 million compared with loss after tax of N155.35 million in 2006.

GREAT NIGERIA INSURANCE PLC: Unaudited result for the half year ended 30th June 2008 shows Gross Premium of N563.7 million, as against N425.2 million in the comparable period of 2007. Profit after tax stood at N85.4 million compared with N75.85 million in 2007.

NEM INSURANCE PLC: Unaudited result for the half year ended 30th June 2008 shows Gross Premium of N2.32 billion, as against N1.31 billion in the comparable period of 2007. Profit after tax stood at N560.92 million compared with N213.8 million in 2007.

OASIS INSURANCE PLC: Unaudited result for the half year ended 30th June 2008 shows Gross Premium of N521.35 million, as against N158.01 million in the comparable period of 2007. Profit after tax stood at N138.05 million compared with N17.11 million in 2007.

CORNERSTONE INSURANCE PLC: Unaudited result for the half year ended 30th June 2008 shows Gross Premium of N2.13 billion, as against N1.7 billion in the comparable period of 2007. Profit after tax stood at N438.7 million compared with N330.52 million in 2007.

ASHAKA CEMENT PLC: Audited result for the year ended 31st December 2007 shows Turnover of N16.5 billion as against N16.8 billion in 2006. Profit after tax stood at N1.6 billion compared with N3.4 billion in 2006. The Directors are recommending a bonus of 1 for 6. The date of closure of register of members is August 25, 2008

ECOBANK TRANSNATIONAL INCORPORATED: Unaudited result for the half year ended 30th June 2008 shows Gross Revenue of N61.3 billion, as against N38.02 billion in the comparable period of 2007. Profit after tax stood at N9.0 billion compared with N6.6 billion in 2007.

OANDO PLC: Unaudited result for the half year ended 30th June 2008 shows Turnover of N124.41 billion, as against N106 billion in the comparable period of 2007. Profit after tax stood at N3.7 billion compared with profit after tax and exceptional items of N2.31 billion in 2007.

STERLING BANK PLC: Unaudited result for the third quarter ended 30th June 2008 shows Gross Earnings of N27.1 billion, as against N16.01 billion in the comparable period of 2007. Profit after tax stood at N4.6 billion compared with N2.5 billion in 2007.

RT BRISCOE (NIG) PLC: Unaudited result for the half year ended 30th June 2008 shows Turnover of N9.03 billion, as against N8.01 billion in the comparable period of 2007. Profit after tax stood at N391.1 million compared with N326.04 million in 2007.

IKEJA HOTEL PLC: Unaudited result for the half year ended 30th June 2008 shows Turnover of N3.22 billion, as against N2.5 billion in the comparable period of 2007. Profit after tax stood at N555.61 million compared with N397.84 million in 2007.

LAFARGE WAPCO PLC: Unaudited result for the half year ended 30th June 2008 shows Turnover of N22.2 billion, as against N19.9 billion in the comparable period of 2007. Profit after tax stood at N4.75 billion compared with N5.82 billion in 2007.

TRIPPLE GEE & CO. PLC: Unaudited result for the first quarter ended 30th June 2008 shows Turnover of N225.6 million, as against N161.82 million in the comparable period of 2007. Profit after tax stood at N26.14 million compared with N16.9 million in 2007.

FIRST ALUMINIUM NIGERIA PLC: Unaudited result for the half year ended 30th June 2008 shows Turnover of N4.28 billion, as against N4.3 billion in the comparable period of 2007. Loss after tax stood at N13.82 million compared with N171.7 million in 2007.

INVESTMENT & ALLIED ASSURANCE PLC: Audited result for the year ended 31st December 2007 shows Gross Premium of N675.7 million as against N159.2 million in 2006. Profit after tax stood at N304.65 million compared with N54.64 million in 2006. The Directors are recommending a dividend of 0.8 kobo per share. The date of closure of register of members is August 8, 2008 while payment date is September 8, 2008.

INVESTMENT & ALLIED ASSURANCE PLC: Unaudited result for the half year ended 30th June 2008 shows Gross Premium of N611.93 million, as against N354.2 million in the comparable period of 2007. Profit after tax stood at N252.9 million compared with N136.8 million in 2007.

REPORT ON THE OTC MARKET FOR FGN BONDS
A turnover of 371.63 million units worth N368.14 billion in 3413 deals was recorded this week, in contrast to a total of 232.62 million units valued at N232.6 billion exchanged in 2001 deals during the week ended July 24, 2008. As in the preceding week, the most active bond (measured by turnover volume) was the 5th FGN Bond 2018 Series 2 with a traded volume of 34.85 million units valued at N31.51 billion in 287 deals.

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The Central Bank of Nigeria (CBN) yesterday shifted the deadline for Banks to adopt a uniform accounting year end to December 2009. This according to CBN was in response to “irrational behavior” of some banks in their attempt to mobilize deposits. The direct impact of this announcement could at least ease the current strain in liquidity created in a bidding continuum following the banking industry’s battle for deposits.

This could unravel a long sought key to unlock institutional funds. The key to market recovery in our view remains a total change in general mindset. We perceived that prevailing sentiment has been largely speculative and short-term, which has consistently denied the market the so desired rally and momentum. We can’t conclude without pointing out that this has, in a way, present opportunities for investors seeking long positions as some equities are currently trading in their oversold bands. Here is CSL Securities’ view of the impact of this announcement:

In our opinion, The CBN postponement by one year for banks to converge their year end may offer a respite both for the banking sector directly and also the capital market as the sector constitutes above 60% of the market capitalization of the Nigerian Stock Exchange. While the banks may heave a sigh of relief, stakeholders, especially Nigeria’s foreign partners and investors may worry about the credibility of CBN or question the decision-making process of the industry regulator, as policy somersaults have been the bane of the country both in the past and in the present times.

It can be hoped that Nigerian banks will put on their thinking caps to utilize this window of time extension to ensure an orderly convergence without doing damage to the banking sector and the economy as a whole. We also hope that regulatory authorities and managers of the Nigerian project will be more consultative and engaging with industry operators and stakeholders in making major policy decisions that impact on the economy.

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Nigerian banks have been fairing well of recent. Oceanic Bank, UBA and GT Bank were among the banks that the most significant rises in the last year. Oceanic Bank leaped 565 places to now be ranked the 310th top bank in the world while UBA, GT Bank and Access Bank are ranked 392nd, 369th and 359th respectively. I more surprised by the performance of Access Bank. I wasnt expecting them to be so highly ranked. The rankings of other banks will be posted as soon as they are received. Here is an excerpt of the report from The Banker Magazine:

At first and second place were Nigerian banks. Oceanic Bank leaped a staggering 565 places up the rankings from 875 in last year’s rankings to 310 in 2008. The bank’s Tier 1 capital exploded from a meagre $297m to $1.75bn. United Bank for Africa also made spectacular strides, jumping 484 places to 392, with a growth in Tier 1 capital from $296m to $1.25bn.

A third Nigerian bank, Guaranty Trust Bank, also made it into the Top 10 in 2008. It registered Tier 1 capital of $1.38bn, up from $406bn last year, and soared 371 places in the rankings to 369. Nigerian banks’ phenomenal growth was triggered by laws passed in 2005 setting a minimum capital requirement of about N25bn ($195m). The legislation was followed by a consolidation of the banking sector from 89 banks in 2005 to 24 banks today.

In a separate report, The Banker Magazine also reported that Nigerian banks are seriously catching up with their South African counterparts:

The total Tier 1 capital of Nigerian banks in the Top 1000 has more than doubled to $11.29bn in 2008’s rankings from $5.38bn in 2007. It takes Nigeria’s share of the sub-Saharan pie to 34% of total Tier 1 capital, up from 24% in 2007. South Africa’s share of the pie has fallen from 71% last year to just 62% in 2008.

New entries among the world’s Top 1000 banks are Platinum-Habib Bank and Access Bank. In terms of growth, it is Access Bank that has impressed the most. In 2007, it did not even feature in the Top 1000 World Banks, and yet this year it enters the league at number 359, with Tier one capital of $1.43bn.

Other impressive performers this year include Oceanic Bank, which shot up the rankings from 875th in the world in 2007, with Tier 1 capital of $297m, to 310th in the world today, with Tier 1 capital of $1.75bn.

Guaranty Trust Bank also performed well. It leaped 371 places in the global rankings to 369th, with Tier 1 capital of $1.38bn, up from $406m last year. United Bank for Africa also made good headway in the rankings. It is now the 392nd biggest bank in the world with Tier 1 capital of $1.25bn. This is up from 876th place last year, when it had just $296m in Tier 1 capital.

The next step for Nigeria’s banks is to convert such phenomenal capital growth into profits. This year’s figures show that despite such enormous growth, return on capital for the sector has actually fallen from 21.9% last year to 18.6% this year. In South Africa, however, return on capital leaped from 38% to 42%.

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Business Day Online is reporting that Dunlop Nigeria, after 45 years of tyre production Nigeria, will be closing its N8billion tire plant due to the persistent power cuts that has more than trippled the cost of production and reduced the company’s ability to make a profit.

… Dunlop plc, the nation’s only surviving tyre manufacturer is closing down its plant and will now import tyres from South Africa and other Dunlop factories around the world. Impaired by persistent power outage, epileptic gas supply, rising cost and failed government policies, Dunlop plc’s board has approved a “strategic redirection” of the company, ending its 45 years history of manufacturing and signaling Nigeria’s further descent into economic maelstrom. In particular, the company has suffered, like many other manufacturers in the country, from the inability of the Federal Government to solve Nigeria’s current most dangerous economic problem, inefficient power generation. This has severely crippled its production capacity.

Business Day also found that the company has for long suffered from inconsistent government tariff policies, some of which made nonsense of business plans predicated on production, a situation which placed importers of tyres at an advantage over genuine local manufacturers.

Dunlop produces both car and truck tyres in its factory at Ikeja in Lagos State. This accounts for 15 percent of tyre consumption in the country. The remaining 85 percent is imported into the country by big tyre importers such as Michelin, Bridgestone, Pirelli, and Goodyear as well as imports from Asia and eastern Europe.

This will result in the lay off of over 1000 people. It also means that in just over year, Nigeria will go from meeting 60% of her tire needs through local production to 0% after Michellin closed its plant earlier in the year.

This is in order to restore shareholder value in the company after recent losses brought about by huge extra production costs, 40 percent of which is accounted for by power outages. The company currently spends about N150 million monthly to generate the power it needs instead of paying about N40 million if they had regular power supply from the Power Holding Company of Nigeria (PHCN).

With the scaling down of tyre production by Dunlop, it means in less than two years, Nigeria has moved from meeting about 60 percent of its tyre demand, which was the combined capacity of both Michellin and Dunlop to virtually nothing, which will happen when and if Dunlop finally shuts down its production.

The tariff for truck tyres had been reduced by the government from 40 percent to 10 percent. Dunlop claimed it had built its ultra modern truck tyre facility at a cost of N8 billion on the basis of the 40 percent tariff on such tyres, adding that the policy reversal of the government meant it can no longer compete with imported tyres. The plant was commissioned in 2005 but began commercial operations in 2007, coinciding with government’s introduction of a lower tariff regime.

The 1,000 job cuts planned by the firm will be a big blow for those affected, some of whom have worked in the company for many years. The losses will eventually mean a loss of 80 percent of the current staff level.

Asked about the plans for the subsidiary of the company in Delta and Cross River states, Pamol, Mohammed Yinusa, the group managing director of the company, said the company plans to export the rubber it produced. Only recently, the company expanded the rubber production capacity of Pamol by 6,000 to 15,000 hectares.

I am not sure the government understands the severity of the problem. Dunlop is like an icon and for it to be closing its plant is a very very big deal

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