Firms’ restructuring bolsters demand for equities

Past Chairman of Financial Reporting Council of Nigeria, Hajiya Mariam Ladi Ibrahim (left); Chief Executive Officer, Jim Obazee; and Director in the Federal Ministry of Industry, Trade and Investment, Mallam Ajiya Mamman, during the council’s summit in Lagos.

Past Chairman of Financial Reporting Council of Nigeria, Hajiya Mariam Ladi Ibrahim (left); Chief Executive Officer, Jim Obazee; and Director in the Federal Ministry of Industry, Trade and Investment, Mallam Ajiya Mamman, during the council’s summit in Lagos.

PRESSURE by investors to garner the low-priced stocks has further been bolstered by the recent boards’ restructuring and changes in ownership in some quoted firms.

Expectedly, the scenario has induced a surge in the All-Share Index and market capitalisation for two consecutive days.
On Monday, December 21, market capitalisation, which opened at N9.124 trillion, rose by N65 billion to close at N9.189 trillion. On Tuesday, December 22, the capitalisation profile again appreciated to close at N9.255 trillion, an increase of N66 billion. The All-Share Index crept up from its Monday position of 26,728.64 to 26,918.22 on Tuesday, an increase of 189.58 basic points.

But on Wednesday, December 23, the nearness of Xmas intensified sell-off pressure and re-energised the bears to overwhelm the emerging bulls.

This gave rise to a downward swing in capitalisation from Tuesday’s N9.255 trillion to N9.238 trillion on Wednesday, translating to a loss of N17 billion. Similarly, All-Share Index crashed by 46.98 basic points from 26,918.22 where it was on Tuesday to 26,871.24 on Wednesday.

Analysts, who observed that this was an unusual development in yuletide season when the market ought to be bearish all through, attributed the sporadic bullish surge to the overwhelming demand by investors, whose appetites to acquire the low priced shares currently awash in the market, were further encouraged by the restructuring and changes in ownership that took place in some quoted firms, particularly in Dangote Cement Plc, whose shares were heavily traded at the bourse on Monday.

A week ago, some listed firms announced the retirements and appointments of new directors to alert the investing public and also to comply with the rules and regulations of the NSE as well as that of the Nigerian’s corporate governance code.
Such announcements, some notable stockbrokers told The Guardian, assisted investors to determine, which companies to invest in and which not to venture at all.

They explained that the board members and top management team of companies determine the performance of such companies.
“So, when an announcement is made about the board and top management of companies, investors take time to look at the track records of the personalities involved and if they are credible, that would mean that the companies would be well-managed for profit and growth,” said one of the CEOs of Stockbroking firm, Abayomi Sanya of Goldbanc Management Assets Limited (GMA).
Firms that recently restructured and notified the Exchange of changes in their boards include: Royal Exchange Plc, which announced that its Group Managing Director, Chike Mokwunye, would proceed on his terminal leave from December 31, 2015 and approval of the appointment of Alhaji Auwalu Muktar, as the Acting Group Managing Director.

Also, Neimeth International Pharmaceuticals Plc announced the retirement of its Managing Director/CEO , Emmanuel Princewill Ekunno and that Dr. (Mrs.) Ebere Igboko Ekpunobi is the acting Managing Director/CEO effective November 23, 2015.

Another firm that announced a change was Tiger Branded Consumer Goods Plc, which confirmed the resignation of a director from the board of Stanbic IBTC Holdings Plc.

The company notified the Exchange that an agreement between Tiger Brands Limited and Dangote Industries Limited (DIL) in respect of Tiger Brands’ Shareholding in Tiger Branded Consumer Goods Plc of Nigeria (TBCG) had been packaged and that Tiger Brands had decided not to provide further financial support with respect to its investment in Tiger Branded Consumer Goods PLC (TBCG). The Parties have reached an agreement regarding the terms of the transaction.

They gave assurance that the transaction envisages that sufficient capital would be injected into TBCG in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders.

According to the arrangement, and subject to regulatory approvals, DIL will provide TBCG with immediate cash injection of N10 billion. In return, Tiger Brands will divest its 65.7 per cent shareholding in TBCG to DIL for a nominal consideration and write off its shareholder loans to TBCG.

Similarly, Niger Insurance Plc announced that effective January 1, 2016, Alhaji Bala Zakariyau (Chairman) and Mr. Frederick Nnamdi Udechukwu (Director) would retire from the board of the company.
Mr. Yusuf H. Abukakar, OON, was also appointed as Chairman of the Company to replace the retiring Alhaji Bala Zakariyau.
The board also approved the appointment of Umaru Modibbo and Dr. Stephen Dike as non-executive directors of the company.

Another company, which also made announcement, was Multiverse Resources Plc. It notified the Exchange that the name: Multiverse Plc has been changed to Multiverse Mining and Exploration Plc with effect from November 13, 2015 and that the change was implemented by the Exchange and the Central Securities Clearing System Plc effective, December 14, 2015.

It stated that the change of name was approved by the company’s shareholders at its Annual General Meeting (AGM) held on September 22, 2015.
Another company that joined in the announcement spree was Stanbic IBTC Holdings Plc, which disclosed the resignation of Mrs. Maryam Uwais, as an independent non-executive director from the board of the company.

Her resignation was effective November 30, 2015 to take up an appointment with the Federal Government as Special Adviser to the President on Social Investments.

Guinness Nigeria Plc also formally announced that it has acquired exclusive distribution rights to the International Premium Spirits Brands of Diageo Plc in Nigeria and that as a part of the transaction, Guinness Nigeria will also take over various assets including the current inventory of Diageo Brands Nigeria Limited, the wholly-owned Diageo business which currently distributes and markets the IPS brands in Nigeria. The consideration for the transaction is approximately N2.35 billion.

The transaction, it further stated, is expected to be concluded by December 31, 2015; and the new distribution agreement for the IPS brands would become effective on January 1, 2016 subject to receiving all regulatory approvals.
Peter Ndegwa, the Managing Director/CEO of Guinness Nigeria Plc said: “The transaction would facilitate the achievement of our ambition to create the best performing, most trusted and respected consumer products company in Nigeria by leveraging the strength of our unparalleled portfolio of beer, adult premium non-alcoholic drinks (APNADs), ready to drink (RTDs) as well as spirits.”
Niger Insurance Plc also announced that effective January 1, 2016, Alhaji Bala Zakariyau (Chairman) and Mr. Frederick Nnamdi Udechukwu (Director) would retire from the board of the Company.
The board also approved the appointment of Umaru H. Modibbo and Dr. Stephen N. Dike as non-executive directors of the company. Mr. Yusuf H. Abukakar was also appointed as Chairman of the company to replace the retiring Alhaji Bala Zakariyau.
Modibbo, according to the company, is a graduate of Business Administration from the Ahmadu Bello University Zaria (1983). He started his working career with the Gongola State Ministry of Commerce and Industries in 1985.
He was also a pioneer Director of Central Securities Clearing Systems (CSCS) Limited and also served as a member of The Nigerian Stock Exchange Investors’ Protection Fund among other key appointments.

Dr. Stephen N. Dike is the Chairman of Advanced Management and Technology Solutions (AMTS) and Chairman of Montgomery Nigeria Limited. He has extensive executive level management experience in public administration, support operations, information communication and technology (ICT), economic and business development, and financial management.

Nascon Allied Industries Plc, explained that at the company’s board meeting held on Tuesday, December 15, 2015, the following directors resigned their appointment as directors of the Company with effect from December 15, 2015: Alhaji Aliko Dangote, Alhaji Sani Dangote and Mr. S.O. Olarinde.

The firm also stated that the following were appointed as directors of the company with effect from December 15, 2015: Mrs. Yemisi Ayeni – a former Finance Director of Shell Nigeria Exploration and Production Co. Limited and Present Council Member of The Nigerian Stock Exchange. Dr. Chris Ike Ogbechie – The current Chairman of Diamond Bank Plc and a Facilitator in Lagos Business School and Fatima Wali-Abdulrahman – an Architect and a Board member of Oando Foundation, Consolidated Discounts and former member of Lagos State University Governing Council.

Mrs. Ayeni was appointed as Chairman of the Board of Directors of NASCON Allied Industries Plc at the same meeting, the stamen added.

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