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Investors close week with N206bn loss

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The Nigerian equities market closed the week with a loss of N206 billion by investors on Friday.

This followed the dip in the share price of PZ, ETI and First Bank, amongst others on the trading floor today.

After five hours of trading at the capital market, the equity capitalisation crashed to N55.2 trillion from N55.4 trillion posted by the bourse on Thursday.

Similarly, the All-Share Index (ASI) decreased to 97,612.51 from 97,978.02 recorded the previous day.

The market breadth was negative as 16 stocks advanced, 19 declined, while 84 others remained unchanged in 7,585 deals.

Intenegins, Cutix, and Jaiz Bank led other gainers with 9.93 percent, 9.84 percent and 8.00 percent growth in share price to close at N1.55, N3.35, and N2.16 from the previous N1.41, N3.05, and N2.00 per share respectively.

On the flip side, PZ, ETI and First Bank led other price decliners as they shed 10 percent, 9.98 percent and 9.31 percent each to close at N19.80, N21.65 and N20.45 from the initial N22.00, N24.05 and N22.55 percent per share.

On the volume index, ETI traded 554 million shares valued at N12.01 billion in 42 deals followed by UBA which traded 38.932 million shares worth N743 million in 817 deals.

Zenith Bank traded 24.485 million shares valued at N738 million in 616 deals.

On the value index, ETI recorded the highest value for the day trading stocks worth N12.01 billion in 42 deals followed by UBA which traded equities worth N743 million in 817 deals.

Zenith Bank traded stocks worth N738 million in 616 deals.

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Recapitalisation: Wema Bank gets regulatory approvals for N40bn rights issue

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Wema Bank says it has successfully concluded the first tranche of its recapitalisation exercise having secured all relevant regulatory approvals for the allotment of its N40 billion rights issue.

Its Managing Director, Mr Moruf Oseni, disclosed this in a statement made available on Friday in Lagos.

Oseni said as a forward-thinking and pioneering bank, the financial institution in December 2023 launched N40 billion rights issue which had been approved by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

CBN in March, launched a recapitalisation programme requiring commercial banks to raise fresh capital.

This is in alignment with the minimum requirement for their respective banking licenses within a 24-month timeline spanning April 1 to March 31, 2026.

The goal of recapitalisation is to simultaneously boost the Nigerian economy and strengthen its financial services industry.

Oseni said: “With this remarkable development, Wema Bank has now successfully raised the first tranche of its plan in the minimum requirement laid down by the CBN.

“The bank’s resolve in retaining its commercial banking license with National authorisation and the N40 billion rights issue is a step in that direction.

“Our move to commence our capital raise programme very early demonstrates our push for excellence, and with a strong emphasis on our digital play, we are set to amass more successes in the coming months,” he said.

The managing director expressed satisfaction with the vote of confidence given by the bank’s shareholders during its first rights issue exercise, noting that its shares were fully subscribed.

Oseni stated that the bank also obtained the approval of its shareholders at its 2023 annual general meeting to raise an additional N150 billion to meet the capitalisation threshold set by the CBN.

He hinted that the process was expected to be completed within 12-18 months.

Oseni said: “We are committed to providing optimum returns for every stakeholder and the successful conclusion of this N40 billion rights issue is a bold step in the right direction.

“In addition to the upward trend in the bank’s financial performance and the success recorded so far in its recapitalisation exercise, Wema Bank’s corporate rating was recently upgraded to BBB+ by Pan African credit rating agency, Agusto and Co.

“The bank was also retained at BBB by international rating agency, Fitch.”

According to him, over the medium to long term, Wema Bank is positioned to not only dominate the digital banking space but also the Nigerian financial services industry at large as it translates its industry leadership to significant market share.

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Ecobank to raise $600m debt in the next one year

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Ecobank Transnational Incorpora ted (ETI) will raise $600 million through senior secured debts and tier-2 debts over the next year.

This was one of the resolutions from the group’s Annual General Meeting which took place in Lome, Togo on June 6, 2024.

In the notice containing the AGM resolutions, it was contained

“The General Meeting hereby authorises the board of directors to raise within a period of one year from the date of this meeting up to Six Hundred Million United States Dollars (US$600,000,000) in senior-ranked debt, Tier 2-qualifying subordinated debt or a combination of these forms of instruments as the board of directors may deem appropriate.”

Senior ranked debts are a type of debt that has priority over other debts in terms of claims on the assets of the issuer. This means that senior-ranked debt holders are paid before other creditors, such as subordinated debt holders.

Tier 2-qualifying subordinated debt is a type of subordinated debt that qualifies as Tier 2 capital under banking regulations.

It ranks below senior debt but above equity in the event of liquidation, meaning it is riskier than senior-ranked debt but less risky than equity.  An example of tier-2 debts is the $350 million Tier-2 Sustainability Notes listed by ETI on the London Stock Exchange in 2021.

Recall that in April 2024, Ecobank Transnational successfully repaid a $500 million Eurobond which matured on April 18, 2024. The Eurobond, issued in April 2019, was listed on the London Stock Exchange with a coupon rate of 9.5 percent.  This was the group’s inaugural Eurobond, however, its subsidiary, Ecobank Nigeria issued a dollar-denominated bond in 2014.

In 2014, Ecobank Nigeria issued its first ever dollar-denominated bond, a $200 million bond which was listed on the Irish Stock Exchange. The bank received advisory services from the African Export-Import Bank (Afrexim).

And there was an oversubscription on the bond offering.

Then in June 2021, Ecobank Transnational issued $350 million Tier 2 Sustainability Notes, which were listed on the London Stock Exchange. According to the group, these notes were oversubscribed by over 3.6 times, reaching a subscription of $1.3 billion.  The notes which mature in June 2031, will pay an annual interest rate of 8.750% between June 2021 and June 2026. However, from June 2026, the interest rate will change to a new rate called “Reset Interest Rate”.  It was noted in the group’s “Sustainable Finance Framework” that proceeds from the sustainable financing instruments such as the sustainability notes would be used to finance and/or refinance, in whole or in part, green and/or social projects.

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Presco shareholders approve N24.3bn final dividends for 2023

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…Total dividend yields hit 13.6%

Shareholders at the 31st Annual General Meeting (AGM) of Presco Plc, approved a final dividend of N24.30 per ordinary share of 50 Kobo, totaling N24.3 billion, as recommended by the Board of Directors for the financial year ended December 31, 2023.

This is in addition to an interim dividend of N2.00 per 50 kobo share, amounting to N2 billion. Consequently, the total dividend for the year amounts to N26.30 per share, aggregating N26.3 billion.

With a total dividend of N26.30 for FY 2023, Presco posted a dividend yield of 13.6 percent, making it one of the most profitable stocks in the NGX.

During the AGM on Thursday, shareholders also authorised the company to raise additional capital through debt finance, equity raising, or a combination of both, as deemed appropriate by the Directors.

Furthermore, the shareholders empowered the Directors to invest indirectly or through its subsidiary and to acquire assets or a majority of shares in companies or entities operating within the same industry as Presco Plc.

In line with this move, Presco already announced its decision to acquire a 100 percent stake in fellow subsidiary of SIAT SA, the Ghana Oil Palm Development Company.

Addressing Shareholders, the Chairman of the company, Mr Rasheed Sarumi explained that the Board is firmly committed to maintaining the highest standards of corporate governance in line with best practice.

He noted that during the year, Grant Thornton Consultants, an international corporate consultant, repeated the annual Board Assessment and reviewed the Company’s corporate governance policies and procedures to monitor compliance.

According to the Chairman, their report forms part of the annual report and accounts as required by the Securities and Exchange Commission (SEC) Code and the 2018 National Code of Corporate Governance Practice.

The chairman assured the shareholders that Presco Plc is committed to leveraging the abundant business opportunities present within Nigeria and the ECOWAS sub-region to realise its strategic growth ambitions for the benefit of all stakeholders.

He said, “We will continue to strive for operational excellence, pursue substantial growth, and uphold the highest standards of corporate governance.”

Also speaking at the event, Managing Director/ Chief Executive Officer, Mr. Felix Nwabuko, assured shareholders and stakeholders of a rewarding future.

The Company’s Revenue grew by 26.4 percent, from N81.03 billion in 2022 to N102.42 billion in 2023, while Gross Profit grew by 30.13 percent to N65.03 billion.

Profit before tax witnessed an uptick of 152 percent, amounting to N50.01 billion from N19.81 billion recorded in the previous year, and Profit After Tax reached N32.86 billion, marking an increase of 152 percent from the previous year. The firm’s finance costs declined to N8.41 billion from N8.49 billion during the period reviewed.

Presco’s selling and distribution expenses declined to N1.55 billion from N1.79 billion and administrative expenses increased to N20.9 billion from N20.4 billion. Earnings per share rose to N30.42 from N13.03.

Presco closed the trading on Friday, June 7, 2024, at N293.90 per share on the Nigerian Exchange (NGX). The company began the year with a share price of N193.00 and has since gained 52.3 percent this year.

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