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Greenwich Trust Limited, Vetiva Capital Management Limited and Chapel Hill Denham Group Selected By SEC To Stabilize Market

According to Business Day, the 3 companies, Greenwich Trust Limited, Vetiva Capital Management Limited and Chapel Hill Denham Group have been selected by the SEC to stabilize the markets. Here is the report by Business Day:

http://www.proshareng.com/myproshare/portal_news.php?id=5339

Capital market makers emerge

The dwindling fortunes of the nation’s capital market are expected to experience improvement as the three firms that scaled the hurdles en route their appointment as market makers swing into action any moment from now.

The firms which are expected to stabilise the market and rekindle hope to the over 10 million investors are Greenwich Trust Limited, Vetiva Capital Management Limited and Chapel Hill Denham Group.

Business Day investigations at the weekend revealed that the three firms were adjudged by the Securities and Exchange Commission (SEC) as having the capacity to deliver and settle transactions within the prescribed settlement cycle.

Coming on the heels of continuous downward price movement of stocks, analysts said at the week end that the market makers face uphill task of restoring confidence back to the market. For instance, market capitalisation of quoted companies which dropped by N279.3 billion on Thursday lost further ground to N779 billion on Friday, foreclosing possibility checkmating the investment loss in the stock market currently at over N3 trillion.

SEC had recently reeled out rules that would enable qualified operators to qualify as big players or market makers. The new rules for market makers come with the creation of a new rule 31c, which requires companies interested in playing the role to register with it and with the Corporate Affairs Commission (CAC). It said that a player is required to have a minimum paid up capital of N2 billion and maintain sufficient liquid assets to cover its current indebtedness.

The head of media of SEC, Lanre Oloyi, last week confirmed that three firms were successful but would not reveal their identities.

Greenwich Trust Limited, Vetiva Capital Management Limited and Chapel Hill Denham Group, according to SEC, are under obligation to stabilise the market by ensuring continued liquidity, operate within the established rules, bid and offer spread through out the trading session on a minimum quote size of 100,000 units of shares.

It was gathered that the three firms contributed significantly to the formulation of the requirements before they were finally approved by SEC. A source at SEC confirmed to Business Day at the weekend that the success of the project essentially lies with the operators most of whom “were instrumental to the idea of market makers in the first instance”.

Indeed, public information about the market makers revealed that the future is bright for the project as they have all the requirements to succeed.

For instance, Greenwitch Trust is a duly licensed capital market operator and dealing member of the Nigerian Stock Exchange and is made up of five subsidiaries. Greenwitch Trust Group, the parent company, was incorporated in 1992 with strategic focus of using aggressive approach to harnessing market opportunities. At date, its authorised and paid up share capital stand at over N2 billion with shareholders fund in excess of N6 billion.

Vetiva Capital Management on the other hand is a pan African investment banking and financial services company. It is an evolving investment banking brand whose essence is passionately professional. The company has the vision of building a world class investment banking practice with core pan African competency. In December 2007, the company priced the $500 million Global Depository Receipts for Diamond Bank listed on the PSM market of the London Stock Exchange.

Chapel Hill Denham Group, is an amalgam of Chapel Hill and Denham and with a shareholders funds in excess of N9 billion has the ambition to be the leading investment banking firm in West Africa. The vision of the company is to build the leading independent investment banking firm in West Africa, delivering a complete product platform to its clients with leadership positions in key markets.

The group believes that it will retain the competencies of both Chapel Hill and Denham and draw its strengths from the combined experience of both companies and their people of over 50 professionals in Lagos and Abuja.

Chapel Hill and Denham are notable investment management firms but the new group is licensed as an issuing house, fund/portfolio manager and broker/dealer by SEC and is a dealing member of the Nigerian Stock Exchange. - Businessday

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Detailed NSE Report For Week Ended Friday, August 29th

Courtesy of UBA Capital, Afrinvest, Lead Capital, CSL Securities, here is the detailed analysis of the Nigerian Stock Exchange for the week ended Friday, August 29th.

download: Market Analysis for Week Ended Friday, August 29th (151.5KB) added: 01/09/2008 clicks: 54 description: Market Analysis for Week Ended Friday, August 29th

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Big Drops In The Market

These graphs will better explain the significant drop in the NSE index:

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SEC, NSE, CBN, others review margin trading

SEC, NSE, CBN, others review margin trading

Apparently worried by the continuous drop in share prices of quoted companies on the Nigerian Stock Exchange (NSE), the Securities and Exchange Commission (SEC) has constituted a committee charged with the responsibility of working out modalities for investing with margin funds by stockbroking firms and investors.

The committee, according to SEC, has membership drawn from the Commission, the Nigerian Stock Exchange, Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC). Mr. Lanre Oloyi, spokesman for SEC, disclosed that the committee was mandated to work out modalities for effective implementation of margin trading in the Capital Market which, according to the Commission, is practised in all capital markets worldwide.

In Capital Market parlance, margin trading or funding is a system whereby stockbroking firms, corporate organisations and individuals borrow money from bankers to invest in stocks, after which they sell, pay back and make their own money at the appropriate time. To market watchers, the practice has helped the stock market to grow, especially in recent times when its fundamentals grew tremendously, before the CBN recently stopped it, which made the market to crash significantly.

For instance, at the close of trading last week, the All-Share Index of the NSE fell by 4.57 per cent to close at 56,23.02 points, while market capitalisation closed lower at N10.95 trillion. The Commission said the modalities would soon be released, noting that margin trading was not applicable in only Nigeria but was a worldwide phenomenon.

According to Oloyi, the Commission is confident that the Stock Market indices would rise soon when more blue chip companies quoted on the NSE present their scorecards. The Commission also assured investors that the Capital Market remained a solid and safe investment haven for both local and international investors.

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STOCK MARKET REPORT FOR THE WEEK ENDED FRIDAY, 2ND MAY 2008

STOCK MARKET REPORT FOR THE WEEK ENDED FRIDAY, 2ND MAY 2008

A turnover of 2.63 billion shares worth N47.6 billion in 66,373 deals was recorded this week, in contrast to a total of 2.6 billion shares valued at N48.3 billion exchanged last week in 80,499 deals. The Stock Market opened for four days as Thursday was declared as Public Holiday in commemoration of Workers Day.

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

The Banking sub sector was the most active during the week (measured by turnover volume), with 1.35 billion shares worth N34.02 billion exchanged by investors in 30,882 deals. Volume in the Banking sub sector was largely driven by activity in the shares of FirstInland Bank Plc, United Bank for Africa Plc and Afribank Nigeria Plc. Trading in the shares of the three Banks accounted for 578.53 million shares, representing 43% of the subsector’s turnover.

The Insurance subsector, boosted by activity in the shares of Universal Insurance Co. Plc, followed on the week’s activity chart with a turnover of 714.2 million shares valued at N2.85 billion in 12,755 deals.

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

Price Movement :

The All-Share Index dropped by 2.11% to close on Friday at 59,124.87. The market capitalization of the 203 First -Tier equities closed lower at N11.43 trillion.

Thirty-Five (35) stocks appreciated in price during the week, lower than the sixty (60) in the preceding week. Ecobank Transnational Incorporated led on the gainers’ table with a gain of N6.00 to close at N244.00 per share while Total Nigeria Plc followed with N4.35 to close at N239.95 per share. Other price gainers in the Top 10 category include:

• G Cappa Plc - N4.04

• Oando Plc - N3.00

• Nigerian Breweries Plc - N2.99

• Dangote Flour Mills Plc - N2.83

• Guinness Nigeria Plc - N2.57

• C & I Leasing Plc - N1.69

• Afribank Nigeria Plc - N1.55

• Nigerian Bag Manufacturing Co. Plc - N1.54

Eighty - Three (83) stocks depreciated in price during the week, lower than the eighty - nine (89) in the preceding week. Mobil Oil Nigeria Plc led on the price losers’ table, dropping by N51.77 to close at N248.21 per share while Lafarge WAPCO Plc followed with a loss of N11.68 to close at N51.32 per share. Other price losers in the Top 10 category include:

• Nestle Nigeria Plc - N8.00

• Ashaka Cement Plc . - N7.01

• Conoil Plc - N5.25

• Eterna Oil & Gas Plc - N4.73

• Nigerian Aviation Handling Co. Plc - N4.14

• PZ Cussons Nigeria Plc - N4.05

• Union Bank of Nigeria Plc - N3.75

• RT Briscoe (Nig) Plc - N3.74

The prices of six equities were adjusted for dividend and/or bonuses as recommended by the Board of Directors. Total Nigeria Plc was adjusted for final dividend of N6.40 per share. Mobil Oil Nigeria Plc was adjusted for dividend of N4.70 per share and bonus of 1 for 4. Trans-Nationwide Express Plc was adjusted for dividend of N0.10 per share. Nigerian Aviation Handling Company Plc was adjusted for dividend of N0.30 per share and bonus of 1 for 8. Airline Services & Logistics was adjusted for dividend of N0.05 per share. BOC Gases Plc was adjusted for dividend of N0.22 per share.

…Supplementary Listings

A total of 60,099,210 shares were added to the shares outstanding in the name of Mobil Oil Nigeria Plc following the bonus of 1 for 4. Also, a total of 109,375,000 shares were added to the shares outstanding in the name of Nigerian Aviation Handling Co. Plc following the bonus of 1 for 8.

Technical Suspension

This was imposed on Nigerian Wire Industries Plc on Monday, April 28, 2008 on receiving the Company’s application to undertake supplementary share offering.

COMPANY NEWS

ECOBANK TRANSNATIONAL INCORPORATED: Audited result for the year ended 31st December 2007. The Directors earlier recommended a dividend of 2 Cents per share. The date of closure of register of members is May 16, 2008 while payment date is June 6, 2008. The Annual General Meeting (AGM) of shareholders is scheduled to hold in Accra, Ghana on May 16, 2008.

ECOBANK NIGERIA PLC: Audited result for the year ended 31st December 2007 shows Gross Earnings of N32.71 billion as against N17.3 billion in 2006. Profit after tax stood at N7.45 billion compared with N3.6 billion in 2006. The Directors are recommending a dividend of N0.24 per share. The dates of closure of register of members and payment would be advised later.

STACO INSURANCE PLC : Audited result for the year ended 31st December 2007 shows Gross Premium of N2.81 billion as against N1.64 billion in 2006. Profit after tax stood at N758 million compared with N491.5 million in 2006. The Directors are recommending a dividend of N0.12 per share. The dates of closure of register of members and payment would be advised later

CONTINENTAL REINSURANCE PLC : Audited result for the year ended 31st December 2007 shows Gross Premium of N343.84 million as against N108.4 million in 2006. Profit after tax stood at N676.7 million compared with N135.8 million in 2006. The Directors are recommending a dividend of N0.05 per share. The date of closure of register of members is May 19, 2008 while payment date is June 5, 2008. The 21st Annual General Meeting (AGM) of

shareholders is scheduled to hold at Golden Gate Restaurant, Ikoyi, Lagos on May 22, 2008 by 11.00a.m.

LAFARGE WAPCO PLC : Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N11.03 billion, as against N9.52 billion in the comparable period of 2007. Profit after tax stood at N1.95 billion compared with N2.64 billion in 2007.

UNILEVER NIGERIA PLC : Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N9.7 billion, as against N8.3 billion in the comparable period of 2007. Profit after tax stood at N1.1 billion compared with N300 million in 2007.

R.T. BRISCOE (NIG) PLC : Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N4.35 billion, as against N3.84 billion in the comparable period of 2007. Profit after tax stood at N181.94 million compared with N149.53 million in 2007.

NIGERIAN AVIATION HANDLING CO. PLC : Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N1.22 billion, as against N852.74 million in the comparable period of 2007. Profit after tax stood at N208.6 million compared with N114.01 million in 2007.

CEMENT COMPANY OF NORTHERN NIGERIA PLC : Unaudited result for the first quarter ended 31st March 2008 shows Turnover of N2.2 billion, as against N2.53 billion in the comparable period of 2007. Profit after tax stood at N135.32 million compared with loss after tax of N18.3 million in 2007.

ETERNA OIL & GAS PLC : Audited result for the year ended 31st December 2007 shows Turnover of N4.91 billion as against N3.51 billion in 2006. Loss after tax stood at N135.5 million compared with profit after tax of N27.91 million in 2006. Directors are recommending a bonus of 1 for 5. The date of closure of register of members is May 28, 2008. The 18th Annual General Meeting (AGM) of shareholders is scheduled to hold at Eko Hotel & Suites, Victoria Island, Lagos on June 5, 2008 by 11.00a.m.

INTERNATIONAL BREWERIES PLC : Audited result for the year ended 31st December 2007 shows Turnover of N561.7 million as against N313.05 million in 2006. Loss before tax and exceptional items stood at N118.21 million compared with N361.4 million in 2006. The date of closure of register of members is May 2, 2008. The Annual General Meeting (AGM) of shareholders is scheduled to hold at Continental Hall, Raz Continental Hotel, Cadastral Zone, Abuja on May 23, 2008 by 11.00a.m. The Company is exempted from payment of taxation as the foreign equity interest exceeds 25 percent.

REPORT ON THE OTC MARKET FOR FGN BONDS

A turnover of 81.72 million units worth N83.8 billion in 705 deals was recorded this week, in contrast to a total of 115.2 million units valued at N118.34 billion exchanged in 927 deals during the week ended April 24, 2008. The most active bond (measured by turnover volume) was the 5th FGN Bond 2013 Series 1 with a traded volume of 22.8 million units valued at N23.03 billion in 183 deals.

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Stock Market Crash Imminent?

There has been some discussion on whether a stock market crash is imminent. Meristem Securities has prepared a wonderful paper on this topic. It’s conclusion is that there are no signs to point to an imminent stock market crash.

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