BUSINESS AM FIRST EDITION, FEB 2018

2
BUSINESS A.M. FEBRUARY, MONDAY 05 - SUNDAY 11, 2018
NEWS
Equities rally moderates as
NSEASI falls 1.98% week on week
Andy Nssien
N i g e r i -
an equities
NEWS traded lower
in the week
ended January
2, 2018 as
benchmark index (NSEA-
SI) fell 1.98 percent week
on week despite surge in
financial services stocks.
The NSEASI, the benchmark
index, and market
capitalization depreciated
by 1.98 percent and 2.09
percent to close the week
at 44,639.99 and N16.02
trillion respectively. Similarly,
all other indices
finished higher during the
week with the exception of
the NSE-main board, NSE
consumer goods and NSE
oil/gas indices that depreciated
by 0.33 percent,
3.33 percent and 0.70 percent
respectively. The NSE
ASeM Index closed flat.
A total of 3.268 billion
shares worth N28.123 billion
in 35,761 deals was
traded during week by investors
in contrast to a total
of 7.157 billion shares
valued at N42.545 billion
that changed hands in the
previous week in 39,037
deals.
The conglomerates
industry followed with
375.113 million shares
worth N1.047 billion in
1,968 deals. The third
place was occupied by
consumer goods industry
with a turnover of
262.198 million shares
worth N6.843 billion in
5,921 deals.
Top three traded equities
were FCMB, Transnational
Corporation of
Nigeria Plc, and Skye Bank
Plc (measured by volume)
accounted for 1.181 billion
shares worth N2.830
billion in 5,219 deals, contributing
36.14 percent
and 10.06 per cent to the
total equity turnover volume
and value respectively.
Market breath closed
better in the week as 49
equities appreciated as
against 30 in the previous
week. Forty-two (42) equities
depreciated in price,
Trading activities
in treasury
NEWS
bills and foreign
exchange drove
FMDQ’s market
turnover to
N142 trillion in 2017. This is despite
a slow recovery from economic
recession, which shaped
most activities in the year.
The FMDQ in its January
newsletter/market report said total
over-the-counter (OTC) market
turnover saw a year-on-year
A major
development
in the week
was the listing
of Seplat’s
additional
volume of
25,000,000
ordinary
shares of
50 kobo each.
Pension funds managers find fortune in
stocks as investments return 21.72% ytd
Steve Omanufeme
Nigerian
pension funds
NEWS
asset managers
are looking
no further than
stocks as the
rally in the market in the last
seven months have put their
investments in pole position,
returning 21.72 percent yearto
date.
The Nigerian Stock Exchange
(NSE) market report
for the week ended February 2,
2018 indicates that its pension
index, which includes about
40 companies with significant
market capitalization, in which
pension funds are invested
returned about 22 percent in
January 2018.
The pension index thus
emerged in the top three of
gainers in the review period.
The banking index topped
indexes with the highest yearto-date
gain of 24.5 percent followed
by the industrial goods
index at 21.92 percent
The pension index specifically
serves as performance
benchmark for pension asset
managers, non-pension asset
managers and investors for the
investment of pension assets. It
also helps PENCOM monitor
compliance and performance
of equities portfolios held by
pension managers.
It equally provides a tracking
mechanism for pension
funds administrators (PFAs),
closed pension funds administrators
(CPFAs) and others
that follow the PENCOM
guidelines, while acting as
benchmark for measuring
performance and reporting
performance to retirement
savings account (RSA) holders.
The Stock Exchange information
guide to the Pension
Index notes that given the size
of the pension fund assets
under management by PFAs,
it is imperative that only companies
with significant market
capitalization should qualify for
inclusion in it.
The NSE Pension 40 Index
has performed well since the
stocks market picked up in the
second quarter of 2017 following
policies by the CBN, which
brought a flurry of portfolio
investors into the market
The development thus freed
The NSE Pension 40
Index has performed
well since the stocks
market picked up in
the second quarter of
2017 following policies
by the CBN
pension schemes from building
up cash holding, which
pervaded the system in 2016
amid fears that equities and
bonds are having negative
returns or are too pricey for
purchase.
According to the Pension
Reform Act of 2014, the allowable
investment instrument
for pension funds shall include
bonds, sukuk, treasury
bills, global depository notes
and other securities issued
by the Federal Government
of Nigeria and CBN or their
agencies as well as special
purpose vehicles and companies
created/owned by
the Federal Government of
Nigeria, provided that the
securities are guaranteed by
the CBN or Federal Government
of Nigeria.
Others are ordinary shares
of public limited liability companies
listed or proposed to be
listed through an initial public
offering (IPO), on a securities
exchange registered by the
country’s Securities and Exchange
Commission .
Money market instruments
of banks and commercial papers
issued by eligible corporate
entities are also eligible
Kemi Adeosun (l), minister of finance, receiving the report of the National Tax Policy Implementation Committee (NTPIC), from
Taiwo Oyedele, vice chairman, NTPIC, in Abuja on Friday
Increased trade in treasury bills, FX drive FMDQ market turnover to 142trn in 2017
Steve Omanufeme
lower than forty-four (44)
equities of the previous
week, while eighty-one
(81) equities remained
unchanged lower than
ninety-eight (98) equities
recorded in the preceding
week.
Also traded during
the week were a total of
32,189 units of Exchange
Traded Products (ETPs)
valued at N1.299 million
executed in 19 deals,
compared with a total of
153,755 units valued at
N1.883 million that was
transacted last week in
11 deals.
A total of 16,268 units
of Federal Government
Bonds valued at N17.053
million were traded this
week in 28 deals, compared
with a total of 6,715 units
valued at N5.318 million
transacted last week in 15
deals.
A major development
in the week was the listing
of Seplat’s additional
volume of 25,000,000 ordinary
shares of 50 kobo
each. The additional
shares were as a result of
the company’s Long Term
Incentive Plan (LTIP) for
the benefit of it’s employees.
With this listing, the
company’s total issued
and fully paid up shares
now stands at 588,444,561
ordinary shares was recorded.
On bonds market, an
additional volume of
45,122,840 units and
64,877,160 units were
added to 14.50% percent
FGN Jul 2021 and
16.2884% percent FGN
Mar 2027 respectively on
the 2nd of February 2018.
growth rate of 24.97 percent, rising
from the N113.65 trillion recorded
in 2016 to N142.00 trillion in 2017.
According to the newsletter,
FMDQ’s markets experienced a
slow but steady improvement,
with growth primarily driven by
trading activities in the FX and
treasury bills (T-bills) markets.
It said trading activities in
the T-bills market contributed
the largest to overall turnover,
accounting for 42.47 percent
of the total market turnover,
whilst FX transactions (including
FX derivatives) followed
with a combined share of 26.90
percent, and repos/buy-backs
accounted for 22.46 percent.
Bonds and money market
transactions (including unsecured
placement & takings,
commercial papers and money
market derivatives), on the other
hand, had smaller shares of the
market, accounting for 7.01
percent and 1.16 percent respectively.
The reported turnover represents
trades executed among
dealing members, dealing
members & clients, and dealing
members & the Central Bank of
Nigeria (CBN).
The FMDQ OTC Market
Turnover Report shows the
turnover on all products traded
on the FMDQ secondary market
– FX, T-bills, bonds (Federal
Government of Nigeria (FGN)
Bonds, other Bonds (agency,
sub-national, corporate, supranational
& Eurobonds) and
money market (repos/buybacks
and unsecured placements/takings).
The figures exclude
primary market auctions
in T-bills and bonds
The FMDQ said it has remained
steadfast in its drive to
support and champion growth
and development in the Nigerian
debt capital, foreign exchange
(FX) and derivatives markets
and would continue to focus
on delivering its mandates for
these markets, in support of the
realisation of the economic development
agenda for Nigeria.
It said with relevant collaboration
and the effective support of
financial market stakeholders in
2017, the OTC Exchange delivered
value-adding initiatives and solutions,
provided quality and reliable
market data and information,
promoted price discovery and
transparency, facilitated education
and capacity building, and
has gradually commenced the
journey towards the integration
of the domestic markets with the
international counterparts.
“Focused on promoting the
development of the markets
within its purview through the
roll out of innovative initiatives
in 2018, with an even expanded
scope to unlock capital through
the markets for the development
of the Nigerian economy, FMDQ
shall continue to work with its
stakeholders to make the Nigerian
financial markets globally
Competitive.’’