20 MARKETS BUSINESS DAY COMPANIES & MARKETS Equity funds count losses as stock market rout takes toll ENDURANCE OKAFOR <strong>BusinessDay</strong> yearto-date analysis of the performance of 10 equity funds in Nigeria between <strong>Jan</strong>uary and November 2nd 2018, shows United Capital Equity Fund topping the losers chart with - 26.04 percent decrease in its unit price, for the period, according to SEC Nigeria data. Other top losers include; Meristem Equity Market Fund (- 25.96%), AXA Mansard Equity Income Fund (14.85%), Stanbic IBTC Aggressive Fund (Sub Fund) with -14.14 percent return and Stanbic IBTC Nigerian Equity Fund (12.94 percent). Meanwhile the benchmark of the Nigerian Stock Exchange (NSE) All Share Index return for the period stood at – 17.47 percent. Responding to the analysis, Johnson Chuckwu, MD of Cowry Asset said the stocks that the mutual funds invested in suffered losses beyond the market return. ”The stocks that gained in 2018 are those that are not qualified as investment instruments by mutual funds and this stocks are called outliners and they moderated the loss in the All Share Index and also because the stocks the mutual funds invested in recorded losses, the return on investments therefore is definitely going to be worst that the bench- mark NSE return,” Chuckwu told <strong>BusinessDay</strong>. In 2018, Nigeria equities lost 18 percent as foreign capital fled emerging markets on the back of rising interest rates in the United States and slower global growth concerns. Other equity funds that outperformed the benchmark although reported negative return include; FBN Nigeria Smart Beta Equity Fund (-12.64%) ARM Aggressive Growth Fund (-11.42%), Legacy Equity Fund (-7.46%), Paramount Equity Fund (-7.24%) and Frontier Fund (-6.61%). Omotola Abimbola, a research analyst at Ecobank, said “delivering a positive return in an equity portfolio in a year the market was down double digits would have meant outperforming the benchmark by over 15 percentage point, and that’s a tall order.” Another analyst who spoke to <strong>BusinessDay</strong> on the condition of anonymity said any fund manager that underperforms the entire market index can be rated as being very weak because there is no fund that includes all stocks on the exchange in its funds or investment portfolio. “Ordinarily, any good fund manager should outperform the market index because it is a basket of good performers and the lagers will weigh down the entire market index because C002D5556 a portfolio investor will first identify the instrument that qualifies for investment in their portfolio, that is those instruments that have very good fundamentals,” the stock market expert said. From a high position of third best performing market in 2017 with 42 percent rally, Nigeria bourse All Share Index dropped 0.24 percent in December 2018 pushing year to day return to -20.<strong>07</strong> percent. This earned the NSE the sixth worst performing market in the world. Rafiq Raji, chief economist at Macroafricaintel said “equities performed poorly both globally and domestically in 2018.” As at the close of the market yesterday, Nigerian equities fell by 1.15 percent led by declines in cement, banks and brewers. An equity fund is a mutual fund that invests principally in stocks. It can be actively or passively (index fund) managed. Equity funds are also known as stock funds. Stock mutual funds are principally categorized according to company size, the investment style of the holdings in the portfolio and geography. The sizes of an equity fund is determined by a market capitalization, while the investment style, reflected in the fund’s stock holdings, is also used to categorize equity mutual funds. A further analysis by <strong>BusinessDay</strong> revealed that Monday <strong>07</strong> <strong>Jan</strong>uary <strong>2019</strong> L-R: Mo Abudu, CEO EbonyLife Tv / executive producer the movie ‘Chief Daddy’; Jimi Agbaje, Peoples Democratic Party, Lagos State Governorship Candidate, his wife, Abiola, during the Grand Premiere of the Movie ‘’Chief Daddy’’ held at Oriental Hotel, Lekki, Lagos the Net Asset Value (NAV) of the Equity Based Funds declined by 14.66 percent from 14.32 billion in <strong>Jan</strong>uary 5th 2018 to 12.22 billion in November 2 2018, data on available on SEC website showed. “Valuations during the period were not really reflective of fundamentals as a significant number of listed firms actually produced decent earnings, Raji mentioned. COMPANY RELEASE BANKING BANKING MRS Oil gets Directors’ approval for relocation of corporate headquarters to Apapa ADAMS SEGUN MRS, an indigenous downstream oil company has notified investors and the general public of its Board’s approval to relocate its corporate headquarters. The statement which was signed by the company secretary, advised the Nigerian stock Exchange that it has received the green light to move its base from the current address at Onikan in Lagos, to Apapa, which is located close to the city’s lagoon and famous for its sea ports and terminals. ‘’MRS Oil Nigeria Plc. hereby notifies The Nigerian Stock Exchange that its Board of Directors has approved the relocation of the Company’s Head Office from No. 8,Macarthy Street, Onikan, Lagos to No. 2, Tin Can Island, Apapa, Lagos. Dealing Members and the general public are hereby notified’’ the statement read. Afemai MFB raises share capital to N500m IDRIS UMAR MOMOH, Benin Afemai Microfinance Bank’s shareholders have approved a fivefold increase of the mortgage bank’s share capital to N500 million from N100 million. The shareholders gave the approval during the bank’s 23rd annual general meeting which took place at its corporate headquarters in Jattu-Uzuaire in Etsako West local government area. The capital raise comes on the heels of the new Central Bank of Nigeria (CBN) newly revised recapitalization’s guidelines. Under the new guidelines state Microfinance banks require a minimum capital of N1 billion, N200 million for Unit Microfinance banks and N5 billion for National Microfinance banks. Pius Akpaibor, chairman, board of directors of the financial institution, in his welcome address said, the bank needed to inject fresh fund of N900 million to be able to sustain the bank’s current status as a State Microfinance Bank latest by April 1, <strong>2019</strong>. “As a first step we intend to raise the authorized capital from N100 million to N500 million. To sustain your bank’s current status as a State Microfinance bank, fresh funds to the tune of N900 million will be injected into it. This is no mean requirement which should be met in the next 16 months- latest April 1, <strong>2019</strong>”, he said. Afemai’s total assets increased 4.9 percent to N562.11 million from N535.74 million in 2017. The bank’s gross earnings grew from N150.79 million to N162. 10million, representing a 7.50 percent increase. However, profit before tax decreased from N28.66 million to N8.84 million representing 69.16 percent while profit after tax also decreased from N27.74 million in 2016 to N7.74 million in 2017, representing a 73.<strong>07</strong> percent decline. Akpaibor said that clients’ deposit increased by 6.98 percent from N295.53 million to N316.15 million in the year under review. The board chairman also explained that the shareholders’ funds grew from N224.79 million to N232.25 million, representing a growth of 3.32 percent, capital adequacy ratio was 50.43 percent while the liquidity ratio was 44.12 percent, which are both above the statutory minimum of 10 percent and 20 percent respectively. He posited that the bank’s loans and advances decreased 2 percent from N385.23 million to N377.14 million. Akpaibor said that the bank plans to establish a branch in Benin-City in addition to those already established in Afuze, Igarra and Okpilla. GTB announces closed period ahead audited financial statement release SEGUN ADAMS In two news releases sent to the Nigerian Stock Exchange <strong>Jan</strong>uary 4, <strong>2019</strong>, Guaranty Trust Bank Plc. (GTB) a tier- one lender announced its closed period ahead of the release of its full year audited financial report. ‘’Pursuant to the postlisting requirements of the Nigerian Stock Exchange for quoted companies, we hereby inform you of the scheduled commencement of the closed period for trading in the Bank’s shares on <strong>Jan</strong>uary 8, <strong>2019</strong> in respect of the Audited Financial Statement for the year ended December 31, 2018’’ The tier-one bank also notified the public of its Board Meeting to consider the financial reports ahead its release. ‘’The Board of Directors of our Bank is scheduled to meet on Wednesday, <strong>Jan</strong>uary 30, <strong>2019</strong>, to consider the Audited Financial Statements for the year ended December 31, 2018. Issues relating to full year dividend may also be discussed at the meeting’’ The Bank gave the assurance that conclusions reached would be related to the public in due course. ‘’We shall notify you of the decisions reached after the approval of the CBN is obtained.’’ the statement read. GTB closed 1.67 percent higher, gaining 55k to close at N33.50 per share at the end of the first trading week in <strong>2019</strong>. The performance is against the backdrop of a bearish run in 2018, which saw the bank’s share price alongside many other stocks shed value as the market fell 18 percent in the year. Experts expect the performance of GTB to surpass its previous earnings guidance on PAT as N189.6 billion has been estimated to be reported for full year 2018 compared to N174.3 billion, it’s most recent.
Monday <strong>07</strong> <strong>Jan</strong>uary <strong>2019</strong> www.businessday.ng facebook.com/businessdayng @Businessdayng @Businessdayng BUSINESS DAY 21 COMPANIES & MARKETS Business Event L-R: Tobi Oyewole, corporate social responsibility analyst, The Nigerian Stock Exchange (NSE); Temitayo Ade-Peters, team lead, CSR, NSE, presenting Cheque and Food items donated by Employees of The NSE to Chioma Ohakwe representing the Staff and students of Bethesda Home for the Blind as part of NSE Employee Give-Back Initiative aimed at extending a hand of care to the less privileged during festive seasons in Lagos L-R: Sunday Okereke, regional sales manager, East, PZ Cussons Consumer; Mercy Johnson-Okojie, celebrity brand influencer; P. O. Konyeha, active distributor, Port Harcourt Territory; Ahusimere Ejiroghene, brand manager, Morning Fresh, PZ Cussons Consumer, and Sunday Ekpo, area sales manager, PZ Cussons Consumer, at the official Morning Fresh trade launch in Port Harcourt, recently. L-R: Elizabeth Omolade, Ibe New President of the Club; Tajudeen Adegboyega Akande, Chairman of the occasion and President Lagos Country Club; Dupe Dada District Governor of the Association of Lions Clubs International, 404B2, Nigeria, and Asiwaju Olasunkade Azeez, a one time President of llupeju Lions Club under the district and the Vice Chairman, Badminton Section, during the formal presentation of new President and other Officers of Ikeja Metro Lions Club at Ikeja recently. L-R: Chuks Enwereji, Vice-chairman IADC Nigeria; Marvelyn Ehika, Treasurer IADC Nigeria; Juliet Adesunloye, Administrator IADC Nigeria; Ote Enaibe, chairman IADC Nigeria, at the Annual General Meeting held on the 7th of December 2018 at VCP hotel, Victoria Island Lagos.
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