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BusinessDay 09 Apr 2018

4 BUSINESS DAY C002D5556

4 BUSINESS DAY C002D5556 Monday 09 April 2018 NEWS Stakeholders set for BusinessDay Capital Market and Investors Forum IHEANYI NWACHUKWU Consumer firms’... Continued from page 1 tobacco. The firms are Unilever Nigeria Plc, Cadbury Nigeria Plc, Vitafoam Nigeria Plc, Nestle Nigeria Plc, Flour Mills Nigeria Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, International Breweries Plc, Honeywell Nigeria Plc, PZ Cussons Plc, Champion Breweries Plc, Dangote Sugar Nigeria Plc, Dangote Flour Plc, and Nascon Allied Nigeria Plc. Net profit margins (the percentage of revenue left after all expenses have been deducted from sales), for the firms on a cumulative basis increased to 7.65 percent in December 2017 from 4.57 percent the previous year. This compares with a 3.7 basis point drop in margins year on year between 2015 and 2016, periods during which they grappled with a severe dollar scarcity that hindered imports of raw materials to meet production while the devaluation of the currency resulted in foreign exchange losses. “It’s the combination of the two things; improved liquidity and increases in key product price. It’s more of increases in the price of product to make up for slow sales volume as most of their products are inelastic,” said Ayodeji Ebo, managing director and CEO of Afrinvest Securities Limited. “The stability in foreign exchange in 2017 prevented most of these firms from booking foreign exchange losses,” said Ebo. The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-on-year growth reaching 1.9 percent in the final three months of 2017. ers. At the Forum, investment and capital market industry operators will also proffer insights regarding the theme of the conference. Oscar Onyema, chief executive officer, Nigerian Stock Exchange will be the keynote speaker at the conference which holds on April 26, 2018 at the prestigious Intercontinental Hotel, Lagos. Other speakers include: Patience Oniha, Director General, Debt Management Office (DMO); Bola Onadele. Koko, Managing Director and Chief Executive Officer, FMDQ OTC Securities Exchange; and Bola Ajomale, Managing Director and Chief Executive Officer, NASD OTC Plc. Aside the apex and Self-Regulatory Organisations (SROs), the conference also brings together capital market operators from various trade groups with the nation’s capital market, fund managers, and Pension Fund Administrators (PFAs). The conference is themed “Catalyzing listings in a thriving The Manufacturing Purchasing Managers’ Index (PMI) closed March at 56.7 index points as business activities in the country continued to grow, according to the a recent report by Central Bank of Nigeria (CBN). Drilling down into the numbers for consumer goods firms shows that 11 out of 14 firms saw their margins expand in 2017, according to data compiled by BusinessDay. By comparison only Champion Breweries Plc recorded net profit margin expansion for the 2016 financial year. Nestle Nigeria Plc’s saw margins grow at the fastest pace among companies tracked by BusinessDay, with net profit The 2018 edition of BusinessDay annual Capital Market and Investors Forum will be another important gathering of personalities in the nation’s capital market who will be discussing how to catalyse listings in the nation’s thriving market. The event is an annual gathering of government officials, apex and self-regulatory organisations, all capital market operators, investment bankers, policy makers, chief executive officers (CEOs), economists, researchers, analysts, academics, private equity firms, technology startups and firms in need of long term capital. Currently, the strategic partners for the capital market and investors forum are the Nigerian Stock Exchange (NSE), FMDQ OTC Securities Exchange (FMDQ), NASD Plc, Zenith Capital, Nestle Nigeria Plc, among othmarket”. Oil is the big elephant in Nigeria’s capital market as the prices at circa $70 had their highest averages since 2014. International Monetary Fund (IMF) forecasts that Nigeria’s economy will grow by 1.9percent in 2018, driven by a stronger global economy; higher global oil prices and output; FX market stability; and fiscal stimulus Ȧmid all these expected positives, the dearth of new listings in equities, debts, derivatives, and Exchange Traded Funds (ETFs) as well as other alternative asset classes is increasingly attracting questions from many schools of thought. Nigeria joined the league of Argentina, Turkey, and Hong Kong stock markets which outperformed global equities in terms of returns in 2017. Truly, 2017 was a great year for equity investors globally. In Nigeria, over N4.5trillion was gained by stock Continues on page 46 APC set to reverse tenure elongation for Oyegun Committee JAMES KWEN, Abuja The National Executive Council, NEC meeting of the ruling All Progressives Congress, APC holding today is set to make a u-turn on its earlier decision which extended the tenure of the John Odigie-Oyegun-led National Working Committee Members of the party for one year. The Council NEC had fixed Monday to take final decision on the tenure extension for the party’s executives’ after it constituted a 10-member technical committee headed by Gov. Simon Dalung of Plateau to advise its leadership on how to move forward on the matter. This followed President Muhammadu Buhari´s recent opposition to NEC’s approval of tenure extension for the NWC and all executive committees of the party at all levels across the country, a decision he said was unconstitutional. Abdullahi Ganduje, Governor Continues on page 46 L-R: Segun Ajibola, president, Chartered Institute of Bankers of Nigeria (CIBN); Taiwo Adeoluwa, secretary to the Ogun State government; Godwin Emefiele, governor, Central Bank of Nigeria (CBN); Nnamdi Okonkwo, managing director/chief executive officer, Fidelity Bank plc, and Victor Osadolor, deputy group managing director, UBA plc, at the formal launch of the Guardian Compendium on “Financing The Economy” and the conferment of the Economic Personality of the Year Award on Emefiele in Lagos, at the weekend. investors last year. While most major markets posted sizable gains last year, the rising tide did not lift all boats around new listings. The market is expecting MTN Nigeria listing this second half (H2) which will be a big one. Onyema will be leveraging this conference to tell stakeholders further prospects or possible risks to attracting new listings. Corporate institutions have continued to successfully tap the Nigerian debt capital markets (DCM) to access stable long-term finance to fund key activities that ultimately translate to the development of the economy at large. Onadele. Koko is expected to leverage the forum to further inform stakeholders on how FMDQ OTC Exchange has positioned to bring revolutionary changes in the Nigerian DCM. Investors growing interest in un- margins almost tripling to 13.81 percent in December 2017 from 4.35 percent as at December 2016. This is followed by Dangote Sugar Plc, the largest producer of the sweetener, which saw net profit margin more than double to 19.45 percent in December 2017 from 8.49 percent the previous year. “As companies begin to recover, we’re seeing an increase in what they buy from us. Confectioneries, bakeries and beverage companies have increased their demand,” said Abdullahi Sule managing director and CEO of Dangote Sugar Refinery. Nascon Allied Nigeria Plc was efficient in translating top line impressive sales into bottom line growth (profit) as net margin moved to 19.74 percent in December 2017 from 13.20 percent the previous year. The stock prices of some of the firms have been rallying in tandem with margin expansion or improved profitability. Dangote Sugar’s shares have gained 237.79 percent in the last four years to touch down at N21.45 percent as at 2:00 pm close of trading on Friday. Nascon Allied Nigeria Plc shares are up 240 percent in the last four years to close at N21.20 as at 2:00 pm close of trading on Friday. Nestle stock is up 36.4 percent since year end 2015 to close at N1400 on Friday, while Unilever has rallied by 84 percent since 2015, as its net profit margins doubled to 8.2 percent from 4.4 percent. Johnson Chukwu, managing director and CEO of Cowry Asset Management said that individual performances of firms are one out of four factors that determine an investor’s decision to invest in a company. He added that if the economic outlook is negative, then investors will not put their money in firms no matter the stellar performance. “All things being equal, if there is political stability, lower interest rates and low inflation, then firms with increased margins will see investors swoop on their shares,” summed Chukwu.

Monday 09 April 2018 C002D5556 BUSINESS DAY 5

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