34 BUSINESS DAY C002D5556 Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong>
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong> Live @ The Stock Exchange C002D5556 BUSINESS DAY 35 Stock market fails to sustain gains Stories by Iheanyi Nwachukwu The Nigerian stock market failed to sustain last Monday’s gains following a loss of N100billion recorded at the close of trading on Tuesday. While only 18 stocks gained, 37 companies recorded share price decline as the bears resurfaced. Despite selloffs in yesterday’s session, research analysts at Lagos-based Cordros Capital said their theme on the equities market remains positive, “amid strengthening macroeconomic fundamentals.” At the close of trading on Tuesday, the Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.66percent, while the Year-to-Date (Ytd) return stood at 10.61percent. The All Share Index closed at 42,299.56 points as against the preceding day close of 42,579.48 points while Market Capitalisation decreased to N15.180trillion against preceding day close of N15.<strong>28</strong>0 trillion. Seplat Petroleum Development Company Plc recorded the biggest dip, from N671.4 to N657.9, down by N13.5 or 2.01percent. International Breweries Plc followed after its share price declined from N59.85 to N57, down by N2.85 or 4.76percent. Dangote Cement Plc lost N2, from N259 to N257; down by 0.77percent. Lafarge Africa Plc declined from N51.3 to N50, down by N1.3 or 2.53percent; while Julius Berger Nigeria Plc lost N1.1 or 4.24percent, from N25.95 to N24.85. Nestle Nigeria Plc shares advanced most, after rising from N1,378 to N1,400, up by N22 or 1.60percent. Total Nigeria Plc followed from N217 to N232, up by N15 or 6.91percent. Mobil Oil Nigeria Plc stock price increased from N180.5 to N183.9, up by N3.4 or 1.88percent. Conoil Plc share price rose from N32.1 to N35.25, up by N3.15 or 9.81percent; while Cement Company of Northern Nigeria Plc advanced from N16.85 to N18.2, an increase of N1.35 or 8.01percent. Transcorp Plc, Diamond Bank Plc, FBN Holdings Plc, Fidelity Bank Plc and Access Bank Plc were actively traded stocks on the Nigeria bourse Tuesday. The volume of stocks traded increased by 13.98percent, from 384.86million to 438.65million, while the total value of stocks traded increased by 60.76percent, from N5.474 billion to N8.800 billion in 5,433 deals. The Financial Services sector led yesterday’s activity chart with 310.86million shares exchanged for N3.226 billion; followed by conglomerates next with 46.53million shares traded for N109 million. Standard Chartered results show significant improvement in profitability, returns Standard Chartered Plc has released its results for the year ended December 31, 2017. The group financial performance for the year shows significant improvement in profitability and returns. Profit before tax (PBT) of $3billion was up 175percent and up 71percent excluding Principal Finance. Statutory profit before tax of $2.4billion is stated after restructuring and other items and was $2billion higher. Returns on Equity (RoE) improved from 0.3percent to 3.5percent; just under half-way towards the Group’s initial milestone of 8percent. Basic earnings per share increased from 3.4 cents in 2016 to 47.2 cents in 2017. The Board has recommended resuming a dividend given improving financial performance and strong capital; full year dividend of 11 cents per ordinary share proposed for 2017. Standard Chartered Bank intends to increase the dividend per share over time as the Group’s performance improves. Bill Winters, Group Chief Executive Standard Chartered Bank stated “The transformation of the Group continued in 2017 with the significant improvement in underlying profits, a strong capital position and emerging clarity on regulatory capital requirements allowing us to resume paying dividends. We are encouraged by our start to <strong>2018</strong> and remain focused on realising the Group’s full potential.” Operating income of $14.3billion was up 3percent despite a 4percent drag from Financial Markets; 13percent income growth from key areas of investment (half of total), with particular strength in liability-led products; industry-wide low volatility during 2017 impacted performance in Financial Markets; income was 3percent lower quarter-onquarter (qoq) due partly to the early achievement of a bonus in Wealth Management. In its outlook, Standard Chartered Bank is encouraged by its start to <strong>2018</strong> with broad-based doubledigit year-on-year income growth, adding that operating leverage and continued focus on risks is expected to deliver RoE above 8percent in the medium term. In the review 2017 financial year, the group net interest income (NII) increased 5percent and the net interest margin increased slightly to 1.55percent. Other operating expenses of $8.6billion were well controlled, rising 2percent due primarily to variable pay. Over 85percent of the four-year $2.9billion gross cost efficiencies target has been achieved with a year to go. Gross savings funded investment of $1.5billion (2016: $1.4billion), 50percent over the 2015 level. Regulatory costs rose 15percent, with several large programmes including MiFID II and IFRS 9 being implemented. The bank made further significant progress in implementing financial crime prevention capabilities. Asset quality overall has improved with the focus on better quality origination within a more granular risk appetite. Loan impairment of $1.2billion halved as management actions resulted in improvement across all client segments. Profit from associates and joint ventures rose $185million following better performances in China and Indonesia. The bank’s capital and liquidity ratios remain strong; liquidity coverage ratio was 146percent with a prudent surplus to regulatory requirements. The bank saw strong and broad-based balance sheet growth in both customer loans and advances and customer deposits. The impact of adopting IFRS 9 and implementing final Basel III reforms is considered manageable by the bank.