Again, Aliko Dangote’s name popped up in the mega-dollar deals that have characterised the twilight of the Olusegun Obasanjo administration as the Port Harcourt refinery was yesterday sold to a consortium, Bluestar Oil Services Limited, where he holds controlling shares.
BADEJO ADEMUYIWA, Abuja
For an offer of $561-million (N71.8-billion), ownership of the premier refinery now rests with the consortium partners where Dangote holds 55 percent stake. Zenon Oil, promoted by Femi Otedola, holds 25 percent in Bluestar Oil services, with the Rivers State government having 15 percent while Transcorp holds the balance of five percent.
The deal was part of many sealed at the opening of financial bids for some state enterprises held in Abuja under the auspices of the Bureau for Public Enterprises (BPE).
The consortium paid a draft of $300-million (N38.1-billion) at the bid opening and is expected to pay the balance of $261-million within seven days of notification of a successful bid.
Bluestar’s acquisition of Port Harcourt refinery is a fulfillment of the directive given by President Obasanjo that at least one refinery and cement company be reserved for Dangote under the Federal Government’s divestment from control of the commanding heights of the economy.
With Dangote’s earlier foray into cement, sugar and salt production where he exercises near total dominance as well as in rice importation, the business mogul now has effective control of the commanding heights of the economy.
The ownership of the Port Harcourt Refinery yesterday moved to the private sector with an offer of $561 million or N71.8 billion from Bluestar Oil services limited consortium.
Bluestar emerged after both Oando plc and Refinee Petroplus Nigeria Limited were disqualified from the bid in the first round for failure to include the draft for 50 percent of their offer price in their bids.
The sale of Kaduna Refinery elicited a $102-million (N12.9-billion) offer from China National Petroleum Corporation (CNPC), a bid the BPE declared as below the reserve price. If the bid is accepted, the bidder is expected to pay 25 percent of its offer.
Upon ratification by the National Council on Privatisation (NCP), CNPC is expected to pay the 75 percent balance within 60 days of notification of successful bid.
Dangote also offered $1.781-billion (N226.2-billion) for the Federal Government’s 35 percent equity in Onigbolo Cement in Benin Republic, from which 10 percent of the bid offer or $178.1-million (N2.26-billion) cheque was given to the BPE.
Dangote is expected to pay the 90 percent balance within 30 days from today.
Dangote expressed delight after the bid, declaring that Nigerians are the only ones to develop the country’s economy.
"I feel very great. There is nobody that will come and grow our own economy more than us and that is why we are heavily investing because we believe it is our own economy, we believe in the country and we believe in the economic policy of Nigeria and that’s why we are here to make sure that we bid and win. It’s not only about winning. It’s about where do we go from here."
He outlined the post acquisition plan for Port Harcourt Refinery, pointing out it would be reactivated with some investments spread over phases.
"Right now for the reactivation, we intend to pump in $200-million (N25.4-billion) that is for the first phase. The second phase is to double the refinery’s capacity, which I think is going to cost us about $3-billion (N384-billion) and we are ready to do that.
"We intend to make sure that we expand the refinery. Apart from that, we already have plans to build a refinery of 300,000 barrels a day capacity in Lagos. Because really, it is very criminal to be importing petroleum products of $9-billion when we are a producer and that is the main reason why we are here."
For Onigbolo Cement, Republic of Benin, he said: "We are investing over $2-billion (N256-billion) in cement in the next three years."
Dangote denied monopolising the cement market, stating that his intention was to help in building the economy.
"Like what I said earlier on, if we don’t build our economy nobody is going to do it. If anybody is going to come in, he is quite welcome, it’s a free entry, free exit market.
"Number two, if you remember, the first factory that we had producing cement was in 1956. From 1956 up till the time that we entered into cement, the total production of Nigeria went as low as less than 2.3-million tons.
"In a single location last week, we commissioned five million tons capacity. If we are not there, you will not be able to build a house, forever."
He predicted that the price of cement will come down by 2010, adding that the price will not be more than N1,000 anywhere in Nigeria.
"If you look at it today, we are selling cement at N1, 130 depending on the location; so ideally, cement shouldn’t cost, even in Abuja, more than N1, 200.
But at the moment because of the economic prosperity and also the bottlenecks in the import process, the price is higher."
"People are in a hurry. With our capacity today - Obajana, Benue and the two terminals in Lagos and Port Harcourt - we can actually churn out about 38,000 metric tons a day. That is about 2,000 trucks a day.
"And we are going to achieve that in the next four months. In Obajana right now, out of 15,000, we are operating about 5,000 metric tons. By next week, we are going to be at about 10,000.
"Eventually by 2010, we want to make history by making sure that cement does not cost more than N1,000 anywhere in Nigeria. And quote me that is our target.
"Local production is under about 30 percent. But mind you one single line of Obajana is bigger that all the production plants in Nigeria."
Liquefied Petroleum Gas Depots in Calabar, Kano, Ibadan, Enugu, Ilorin and Markurdi were also on offer for bids.
Sahara Energy Resources Limited emerged the preferred bidder for Calabar depot with $11.1-million (N1.42-billion) while MRS Oil and Gas Limited was the reserved bidder with $10-million offer. Lopa Energy Company won the bid for Markurdi depot with $250, 000 (N32-million).
MRS Oil services offered $4-million (N512-million) to win the bid for Kano depot, Le Global also won the bid for Ilorin with $1.948-million (N249.3-million) while Brookport emerged the preferred bidder for Enugu depot with $3-million (N384-million) offer and DSV Pipetronex Limited was the reserved bidder with $2.5-million.
For the winners of the LPG depots, 10 percent of the offered price must be paid into BPE designated accounts within 10 days of official notification of successful bids while the 90 percent balance is to be paid within 60 days of official notification.
Other transactions sealed at the bid opening are Egbin Power plc, which Korea Electric Power Corporation (KEPCO)/Energy Resources Limited at $280-million (N35.84-billion), AYIP-EKU Oil Palm; which attracted N527-million from Wingsong M-House Palm Oil Investment Limited and Ajaokuta Steel Complex, which Global Infrastructure Nigeria Limited got for $525-million (N67.2-billion).
National facilities including Tafawa Balewa Square, Lagos International Trade Fair and the National Arts Theatre all in Lagos were also offered for concession ranging from 25 to 35 years.
Infrastructica offered N35.84-billion to emerge the preferred bidder for the 35 years concession of National Theatre beating BHI Ventures, which offered N28.902-billion to the reserved bidder’s slot.
For the 25 years concession of Tafawa Balewa Square, BHS International is the preferred bidder with the offer of N9.5-billion while Black Swan is the reserved bidder with N9.21-billion.
Aulic Nigeria Limited emerged the preferred bidder for the 25 years concession of Lagos International Trade Fair complex with its N40-billion offer to push Unison Property Development Limited to the reserved slot.
Nine coal blocs and 13 mining titles were also jostled for by a total of 17 prospective investors after which winners emerged.
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Tuesday, May 22, 2007
Shareholders approve N2bn rights issue for CCNN
Shareholders of Cement Company of Northern Nigeria (CCNN) Plc have mandated directors of the company to raise about N1.6 billion new equity funds and finance its business development programmes.
Chinedu Dike
At an extra-ordinary general meeting in Sokoto, shareholders authorised the directors to issue new ordinary shares of 50 kobo each to existing shareholders, thus strengthening the company’s plan to access the capital market for funds.
To realise this aim, the board of the cement company has commenced moves to speed up the rights issue to ensure that they get the offer proceeds by the third quarter.
The net proceeds of the rights issue, estimated at N1.5 billion would be used to set up a 12 megawatts power plant for the company through the purchase of three units of four megawatts (4MW) electric generating sets.
Part of the net proceeds would also be used to buy equipment to store, blend and burn biomass in the cement kiln in furtherance of the company’s alternative energy programme.
Ibrahim Gobir, Chairman, CCNN says the rights issue would enhance the growth of the company as the new power plant and alternative energy project would greatly reduce cost of operations.
He says the board is committed to implementing growth initiatives that would stabilize the operations of the company and ensure better returns for shareholders.
Alf Karlsen, managing director, CCNN), says the energy projects are important for the sustainable profitable operations of the company noting that costs of heavy fuels and diesel constitute about 40 per cent of total costs in 2006.
He points out that the completion of the company-owned power plant would enable CCNN to quit the leasing arrangements it has been using for energy generation since 2001, and be in a better position to manage its energy costs.
"Replacing a portion of the low pour fuel oil (LPFO) we used for heating the kiln and producing clinker with biomass like rice husk and peanuts shells, will further reduce energy costs in the production process," he explains.
According to him, since CCNN does not have access to gas now like its competitors in the southern part of the country, it has to use alternatives it can find to match any cost advantages its competitors are enjoying.
Karlsen expresses optimism that the rights issue would be fully subscribed as shareholders fully support the business development programme of the company.
The CCNN managing director notes that the company is being repositioned for sustainable growth.
According to him, operational and technical problems that adversely affected the profitability of the company in recent times are being addressed to forestall disruption in production that usually lead to operational losses for the company.
He explains that the cement maker has commenced aggressive replacement of facilities and a refurbishment programme since 2001, and is making more investments to strengthen the operations of the company. The replacement of machinery and refurbishment of the kiln would forestall break down in production and sustain increasing capacity utilization that began in 2002.
Karlsen says the company has put in place an efficient monitoring system that would facilitate effective maintenance of machinery and other facilities.
The approval of the rights issue shows the willingness of Heidelberg Cement (HC) Group, the world’s fourth largest cement produer, and other key stakeholders to inject about N1.56 billion new equity funds into CCCN.
Heidelberg Cement, through its subsidiary, Scancem International ANS, is expected to inject about N791 million and could raise their commitment. Three other key stakeholders, Nasdal Bap Nigeria Limited, Dantata Investment & Security Company Limited and five Northern States are expected to inject N184 million, N129.5 million and N199.7 million respectively.
Heidelberg Cement, through Scancem International, has gradually increased its shareholding in CCNN from 40 per cent, acquired from the federal government during privatisation of CCNN in 2000 to 50.7 per cent equity stake through additional subscriptions to two rights issues during the period. This led to reduction in shareholdings by the five Northern States of Kebbi, Sokoto, Kano , Kaduna , Jigawa and Katsina from 36.8 per cent to 12.8 per cent.
Nasdal Bap Nigeria and Dantata Investment hold 11.8 per cent and 8.3 per cent equity stakes respectively while another foreign company, Ferrostal AG holds 0.1 per cent. The Nigerian investing public hold the balance of 16.3 per cent of equities.
Heidelberg Cement (HC) Group is the world’s fourth largest cement supplier, with operations in 50 countries through 469 subsidiaries. The HC Group sold 68 million tonnes of cement in 2005 alone. With a share capital of Euro 296 million and 41,000 employees, the HC Group turnover was more than Euro 7.80 billion while profit before tax totalled Euro 772 million in 2005. The Group commenced operations in Africa in 1965 and its presence in Nigeria dates back to 1981. HC Group, through its subsidiary Scancem International, currently operates in nine African countries including Sierra Leone, Liberia , Ghana , Togo , Republic of Benin , Republic of Niger , Gabon , Tanzania and Nigeria .
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Chinedu Dike
At an extra-ordinary general meeting in Sokoto, shareholders authorised the directors to issue new ordinary shares of 50 kobo each to existing shareholders, thus strengthening the company’s plan to access the capital market for funds.
To realise this aim, the board of the cement company has commenced moves to speed up the rights issue to ensure that they get the offer proceeds by the third quarter.
The net proceeds of the rights issue, estimated at N1.5 billion would be used to set up a 12 megawatts power plant for the company through the purchase of three units of four megawatts (4MW) electric generating sets.
Part of the net proceeds would also be used to buy equipment to store, blend and burn biomass in the cement kiln in furtherance of the company’s alternative energy programme.
Ibrahim Gobir, Chairman, CCNN says the rights issue would enhance the growth of the company as the new power plant and alternative energy project would greatly reduce cost of operations.
He says the board is committed to implementing growth initiatives that would stabilize the operations of the company and ensure better returns for shareholders.
Alf Karlsen, managing director, CCNN), says the energy projects are important for the sustainable profitable operations of the company noting that costs of heavy fuels and diesel constitute about 40 per cent of total costs in 2006.
He points out that the completion of the company-owned power plant would enable CCNN to quit the leasing arrangements it has been using for energy generation since 2001, and be in a better position to manage its energy costs.
"Replacing a portion of the low pour fuel oil (LPFO) we used for heating the kiln and producing clinker with biomass like rice husk and peanuts shells, will further reduce energy costs in the production process," he explains.
According to him, since CCNN does not have access to gas now like its competitors in the southern part of the country, it has to use alternatives it can find to match any cost advantages its competitors are enjoying.
Karlsen expresses optimism that the rights issue would be fully subscribed as shareholders fully support the business development programme of the company.
The CCNN managing director notes that the company is being repositioned for sustainable growth.
According to him, operational and technical problems that adversely affected the profitability of the company in recent times are being addressed to forestall disruption in production that usually lead to operational losses for the company.
He explains that the cement maker has commenced aggressive replacement of facilities and a refurbishment programme since 2001, and is making more investments to strengthen the operations of the company. The replacement of machinery and refurbishment of the kiln would forestall break down in production and sustain increasing capacity utilization that began in 2002.
Karlsen says the company has put in place an efficient monitoring system that would facilitate effective maintenance of machinery and other facilities.
The approval of the rights issue shows the willingness of Heidelberg Cement (HC) Group, the world’s fourth largest cement produer, and other key stakeholders to inject about N1.56 billion new equity funds into CCCN.
Heidelberg Cement, through its subsidiary, Scancem International ANS, is expected to inject about N791 million and could raise their commitment. Three other key stakeholders, Nasdal Bap Nigeria Limited, Dantata Investment & Security Company Limited and five Northern States are expected to inject N184 million, N129.5 million and N199.7 million respectively.
Heidelberg Cement, through Scancem International, has gradually increased its shareholding in CCNN from 40 per cent, acquired from the federal government during privatisation of CCNN in 2000 to 50.7 per cent equity stake through additional subscriptions to two rights issues during the period. This led to reduction in shareholdings by the five Northern States of Kebbi, Sokoto, Kano , Kaduna , Jigawa and Katsina from 36.8 per cent to 12.8 per cent.
Nasdal Bap Nigeria and Dantata Investment hold 11.8 per cent and 8.3 per cent equity stakes respectively while another foreign company, Ferrostal AG holds 0.1 per cent. The Nigerian investing public hold the balance of 16.3 per cent of equities.
Heidelberg Cement (HC) Group is the world’s fourth largest cement supplier, with operations in 50 countries through 469 subsidiaries. The HC Group sold 68 million tonnes of cement in 2005 alone. With a share capital of Euro 296 million and 41,000 employees, the HC Group turnover was more than Euro 7.80 billion while profit before tax totalled Euro 772 million in 2005. The Group commenced operations in Africa in 1965 and its presence in Nigeria dates back to 1981. HC Group, through its subsidiary Scancem International, currently operates in nine African countries including Sierra Leone, Liberia , Ghana , Togo , Republic of Benin , Republic of Niger , Gabon , Tanzania and Nigeria .
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Bright ideas to flourish as SEC approves 11 venture capital firms
GODFREY OBIOMA Small scale entrepreneurs who need seed capital to finance their business ideas have greater chances of realizing their dreams as the Securities and Exchange Commission (SEC) approves the operation of eleven venture capital companies which are already managing N8.6-billion for their clients.
The venture capital companies include SME Managers Limited; Amalgamated Capital Fund Limited; Deap Management and Trust Limited; HNB Trustee Limited; IBTC Ventures Capital and Enterprises Capital Management Limi8ted; First Funds Limited and Intercontinental Capital Market.
According to information from the Securities and Exchange Commission (SEC), the apex capital market regulatory institution, SME Managers Limited is managing about 1.89 billion on behalf of its clients; IBTC Ventures Limited N0.57 billion; Intercontinental Capital Market Limited N1.52 billion; First Funds Limited N4.55 billion, HNB Trustees Limited N0.08 billion and Amalgamated Capital Funds N0.12 billion.
The Investment and Securities Act of 1999 empowers SEC to develop and regulate venture capital companies in the country; monitor the companies and their managers; collate and analyse returns from such firms.
The purpose of the monitoring of venture capital managers is to ensure that the 10 percent of profit before tax set aside by banks for the small and medium industry equity scheme is disbursed by their fund managers.
The inspection of these companies is also meant to collate data on the number of SMEs to ensure that the funds are disbursed to the appropriate sectors of the country.
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The venture capital companies include SME Managers Limited; Amalgamated Capital Fund Limited; Deap Management and Trust Limited; HNB Trustee Limited; IBTC Ventures Capital and Enterprises Capital Management Limi8ted; First Funds Limited and Intercontinental Capital Market.
According to information from the Securities and Exchange Commission (SEC), the apex capital market regulatory institution, SME Managers Limited is managing about 1.89 billion on behalf of its clients; IBTC Ventures Limited N0.57 billion; Intercontinental Capital Market Limited N1.52 billion; First Funds Limited N4.55 billion, HNB Trustees Limited N0.08 billion and Amalgamated Capital Funds N0.12 billion.
The Investment and Securities Act of 1999 empowers SEC to develop and regulate venture capital companies in the country; monitor the companies and their managers; collate and analyse returns from such firms.
The purpose of the monitoring of venture capital managers is to ensure that the 10 percent of profit before tax set aside by banks for the small and medium industry equity scheme is disbursed by their fund managers.
The inspection of these companies is also meant to collate data on the number of SMEs to ensure that the funds are disbursed to the appropriate sectors of the country.
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Saturday, May 12, 2007
First Bank, Zenith, UBA, 7 others for London Stock Exchange
Ten Nigerian banks, including First Bank, Zenith Bank, United Bank for Africa (UBA) and Oceanic Bank International, will form the fulcrum of a strategic move by the Nigerian Stock Exchange (NSE) to get Nigerian companies listed on the London Stock Exchange, one of the most hyped bourses in the world.
GODFREY OBIOMA & Kunle Mayadenu
If this push by the NSE materialises, it will herald the effective arrival of Nigerian companies on the stage of international capital finance market, where there shares can be traded. London is particularly seen as the world’s financial capital with a stock market that attracts interest from companies in North America, Europe, Asia and the Middle East.
The NSE is expected to begin the strategic move when it showcases the 10 banks next month at an LSE investors’ gathering in London.
Farooq Oreagba, managing director, NSE Consult and head of strategy and derivative, of the Exchange told Business Day in an interview that when the idea of trans-border listing on the LSE was muted, the leadership of both Exchanges agreed that some Nigerian listed companies should be made to display their facts-behind-the-figure to international market operators.
Subsequently, the NSE selected 10 banks to be showcased on the LSE.
The banks already pencilled for the international market exposure are First Bank, Union Bank, Zenith Bank, Oceanic Bank, UBA, Intercontinental Bank, GTBank, Afribank, Ecobank and Access Bank.
The choice of these banks was based on their impressive market fundamentals, which are expected to excite offshore fund managers, stock brokers and regulatory agencies, analysts have said.
For example, First Bank reported earning per share of N2.96 in 2004, N2.61 in 2005 and N3.08 in 2006. For Union Bank, it was N1.80 in 2004, N1.65 in 2005 and N1.62 in 2006. Zenith Bank has price earning ratio of 13.71 times in 2005, 13.03 in 2006, and 17.41 as at the second quarter of 2007.
GTBank recorded PE ratio of 15.38 times in 2004, 12.27 in 2005 and 12.64 in 2006.
Zenith Bank currently has the highest market capitalisation of N443-billion; UBA N321.8-billion; GT Bank N304.9-billion; Union Bank N318.3-billion; Oceanic N227.3-billion, while Intercontinental Bank has a market capitalisation of N278.8-billion.
The showcasing of the banks on the LSE next month has been chosen to coincide with an international event that would attract fund managers from around the world. This is designed to be a precursor to the listing of these financial institutions on the LSE.
If the banks pass the first stage of the test, they would be expected to meet some listing requirements of the Exchange.
Although the market capitalisation of these banks do not measure up to those of companies listed on the LSE and emerging markets like South Africa and Egypt, analysts believe that they may be favoured in view of the rising international confidence in the Nigerian economy. Recently, the Standard and Poor’s and Fitch, two international rating agencies, assigned BB- ratings to the economy. These have largely contributed to an increased inflow of foreign equity capital into the country.
A growing understanding in the global arena that the Nigerian market is still grey, waiting to be harnessed is also expected to boost the fortune of locally quoted companies.
So far, only two instruments have enjoyed trans-border listings. These are the UBA Global Depository Receipts, listed on the New York Stock Exchange and OANDO, trading on the Johannesburg Stock Exchange.
Market watchers believe that the listing of more Nigerian companies abroad would further expose them to international investment best practices and re-channelling of global investment into the country.
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GODFREY OBIOMA & Kunle Mayadenu
If this push by the NSE materialises, it will herald the effective arrival of Nigerian companies on the stage of international capital finance market, where there shares can be traded. London is particularly seen as the world’s financial capital with a stock market that attracts interest from companies in North America, Europe, Asia and the Middle East.
The NSE is expected to begin the strategic move when it showcases the 10 banks next month at an LSE investors’ gathering in London.
Farooq Oreagba, managing director, NSE Consult and head of strategy and derivative, of the Exchange told Business Day in an interview that when the idea of trans-border listing on the LSE was muted, the leadership of both Exchanges agreed that some Nigerian listed companies should be made to display their facts-behind-the-figure to international market operators.
Subsequently, the NSE selected 10 banks to be showcased on the LSE.
The banks already pencilled for the international market exposure are First Bank, Union Bank, Zenith Bank, Oceanic Bank, UBA, Intercontinental Bank, GTBank, Afribank, Ecobank and Access Bank.
The choice of these banks was based on their impressive market fundamentals, which are expected to excite offshore fund managers, stock brokers and regulatory agencies, analysts have said.
For example, First Bank reported earning per share of N2.96 in 2004, N2.61 in 2005 and N3.08 in 2006. For Union Bank, it was N1.80 in 2004, N1.65 in 2005 and N1.62 in 2006. Zenith Bank has price earning ratio of 13.71 times in 2005, 13.03 in 2006, and 17.41 as at the second quarter of 2007.
GTBank recorded PE ratio of 15.38 times in 2004, 12.27 in 2005 and 12.64 in 2006.
Zenith Bank currently has the highest market capitalisation of N443-billion; UBA N321.8-billion; GT Bank N304.9-billion; Union Bank N318.3-billion; Oceanic N227.3-billion, while Intercontinental Bank has a market capitalisation of N278.8-billion.
The showcasing of the banks on the LSE next month has been chosen to coincide with an international event that would attract fund managers from around the world. This is designed to be a precursor to the listing of these financial institutions on the LSE.
If the banks pass the first stage of the test, they would be expected to meet some listing requirements of the Exchange.
Although the market capitalisation of these banks do not measure up to those of companies listed on the LSE and emerging markets like South Africa and Egypt, analysts believe that they may be favoured in view of the rising international confidence in the Nigerian economy. Recently, the Standard and Poor’s and Fitch, two international rating agencies, assigned BB- ratings to the economy. These have largely contributed to an increased inflow of foreign equity capital into the country.
A growing understanding in the global arena that the Nigerian market is still grey, waiting to be harnessed is also expected to boost the fortune of locally quoted companies.
So far, only two instruments have enjoyed trans-border listings. These are the UBA Global Depository Receipts, listed on the New York Stock Exchange and OANDO, trading on the Johannesburg Stock Exchange.
Market watchers believe that the listing of more Nigerian companies abroad would further expose them to international investment best practices and re-channelling of global investment into the country.
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Thursday, May 10, 2007
First Bank offers 23 per cent on rights issue
First Bank of Nigeria Plc is offering a rights issue to investors which opens on Monday, May 14, 2007. The offer is coming at 23.3 per cent or N9.40 less than the market price of N40.40.
Chinedu Dike
A total of 1, 624, 253, 238 ordinary shares of 50kobo each is being issued to the investing public by way of offer for subscription at N33.00 per share giving an offer size of N53.6 billion. Also a rights issue of 1, 496, 762, 682 ordinary shares of 50kobo each is also being made to existing shareholders of the bank at N31.00 per share giving an offer size of N43.4 billion. The public offer comes at a discount of N7.40 while the existing shareholders enjoy a discount of N9.40 on the rights issue
Also fresh investments in the bank through the public offer will be made at 18.3 per cent or N7.40 less the current price at the stock market.
Market watchers say this is a very friendly price that the market will readily accept based on the performance history of the bank.
The bank is seeking to raise about N100 billion fresh funds through a hybrid of offer for subscription and rights issue.
All arrangements to the offer were concluded yesterday at a completion board meeting held in Lagos with all parties to the offer putting hands on paper to seal the deal.
According to the bank, the net offer proceeds of N96 billion will be deployed to a number of projects to reposition the bank and boost its working capital.
As contained in the offer prospectus, the proceeds of the offer will be used to widen the bank’s retail infrastructure in Nigeria via the expansion of branch network; strengthen capital base, to support business growth; expand capital resources to exploit value creation opportunities in the regional financial markets.
Specifically, branch expansion will gulp N21.930 billion or 22.8 per cent of the total proceeds, and the projects will be completed over a period of 24 months. Upgrade of branch network will take up N12.225 billion or 12.7 per cent; strategic business development which involves ATM rollout and electronic banking will take up N10.280 billion or 10.7 per cent; increase in equity investment in subsidiaries will gulp N11 billion or 11.5 per cent, while investment in new subsidiaries will take N7.0 billion or 7.3 per cent. The biggest chunk of N27.140 billion or 28.3 per cent will be applied to increase the bank’s working capital, just as N6.425 billion will be used to upgrade information technology infrastructure.
The offer is the highest in the history of the nation’s capital market. Already, opinions are strong that the offer will be over-subscribed given the track record of the bank.
First Bank is currently capitalised at N345.8 billion. This is expected to shot up to N448.7 billion at the conclusion and listing of the new shares.
The bank recorded gross earnings of N51.2 billion for the nine months ended December 31, 2006, compared to the March 31, 2006 full year earnings of N57.4 billion. Profit before tax for the third quarter period stood at N18.8 billion, in contrast to 2006 full year profits of N21.8 billion.
For the 2007 full year ended March 31 2007, the bank is making a forecast of N23.3 billion in pre-tax profits, while after tax profit is projected at N18.3 billion. Shareholders are expected to receive N7.8 billion in cash dividends, translating to a payout rate of 75kobo per share.
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Chinedu Dike
A total of 1, 624, 253, 238 ordinary shares of 50kobo each is being issued to the investing public by way of offer for subscription at N33.00 per share giving an offer size of N53.6 billion. Also a rights issue of 1, 496, 762, 682 ordinary shares of 50kobo each is also being made to existing shareholders of the bank at N31.00 per share giving an offer size of N43.4 billion. The public offer comes at a discount of N7.40 while the existing shareholders enjoy a discount of N9.40 on the rights issue
Also fresh investments in the bank through the public offer will be made at 18.3 per cent or N7.40 less the current price at the stock market.
Market watchers say this is a very friendly price that the market will readily accept based on the performance history of the bank.
The bank is seeking to raise about N100 billion fresh funds through a hybrid of offer for subscription and rights issue.
All arrangements to the offer were concluded yesterday at a completion board meeting held in Lagos with all parties to the offer putting hands on paper to seal the deal.
According to the bank, the net offer proceeds of N96 billion will be deployed to a number of projects to reposition the bank and boost its working capital.
As contained in the offer prospectus, the proceeds of the offer will be used to widen the bank’s retail infrastructure in Nigeria via the expansion of branch network; strengthen capital base, to support business growth; expand capital resources to exploit value creation opportunities in the regional financial markets.
Specifically, branch expansion will gulp N21.930 billion or 22.8 per cent of the total proceeds, and the projects will be completed over a period of 24 months. Upgrade of branch network will take up N12.225 billion or 12.7 per cent; strategic business development which involves ATM rollout and electronic banking will take up N10.280 billion or 10.7 per cent; increase in equity investment in subsidiaries will gulp N11 billion or 11.5 per cent, while investment in new subsidiaries will take N7.0 billion or 7.3 per cent. The biggest chunk of N27.140 billion or 28.3 per cent will be applied to increase the bank’s working capital, just as N6.425 billion will be used to upgrade information technology infrastructure.
The offer is the highest in the history of the nation’s capital market. Already, opinions are strong that the offer will be over-subscribed given the track record of the bank.
First Bank is currently capitalised at N345.8 billion. This is expected to shot up to N448.7 billion at the conclusion and listing of the new shares.
The bank recorded gross earnings of N51.2 billion for the nine months ended December 31, 2006, compared to the March 31, 2006 full year earnings of N57.4 billion. Profit before tax for the third quarter period stood at N18.8 billion, in contrast to 2006 full year profits of N21.8 billion.
For the 2007 full year ended March 31 2007, the bank is making a forecast of N23.3 billion in pre-tax profits, while after tax profit is projected at N18.3 billion. Shareholders are expected to receive N7.8 billion in cash dividends, translating to a payout rate of 75kobo per share.
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N44.4bn Eurobond earns GTBank ‘The Banker —Deal of the year award’
Guaranty Trust Bank’s bid which won the $350 million (N44.4billion)-8.5 percent Eurobond due 2012 has earned the bank ‘The Banker-deal of the year award’.
IHEANYI NWACHUKWU, SIMON UGWU
GTBank has become the first Nigerian bank to win such award by The Banker, Financial Times of London. In a letter signed by Louis Azode, country representative, The Banker, Financial Times of London, made available to Business Day, the Eurobond deal is hugely significant and indicative of the strides that Nigeria has made in improving it credit rating, "as few foreign investors would not have touched Nigeria outside of oil and gas sector, not too long ago".
In January 2007, GTBank launched a five year $350million (N44.4billion) Eurobond, the first dollar-denominated Eurobond issued by Nigerian bank or company in the global capital market.
The initial $300 million (N38.1billion) was 1.7 times oversubscribed and $350 million (N44.4billion) in orders were eventually allotted. The bond according to our source was priced at an effective yield to maturity of 8.62 percent.
The deal of the year award, according to Azode is being given to GTBank this week at Bahrain in the Middle East, "as Bahrain, an oil-rich country opens its ultra-modern and most impressive Bahrain Financial Harbour, indicative of efficient utilisation of oil money".
"Meanwhile, Standard Bank and Afrinvest were the joint lead managers. Standard Bank was the sole book-runner". Azode noted that Industrial and Commercial Bank of China (ICBC) won the ‘first global deal of the year award’ with its $21.9billion (N2.7trillion) initial public offer (IPO).
"It was a unanimous decision by the judges of The Banker that ICBC’s IPO on the Hong Kong and Shanghai stock exchanges is the world’s largest deal to date. The transaction was most spectacular for a bank that had more than 27 percent non-performing assets about two years ago.
Equally, South Africa’s $1.1 billion (N139.7billion) Kumba Resource Unbundling and Eyesizwe Consortium Black Economic Empowerment Transaction grabbed the ‘regional award for African continent’.
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IHEANYI NWACHUKWU, SIMON UGWU
GTBank has become the first Nigerian bank to win such award by The Banker, Financial Times of London. In a letter signed by Louis Azode, country representative, The Banker, Financial Times of London, made available to Business Day, the Eurobond deal is hugely significant and indicative of the strides that Nigeria has made in improving it credit rating, "as few foreign investors would not have touched Nigeria outside of oil and gas sector, not too long ago".
In January 2007, GTBank launched a five year $350million (N44.4billion) Eurobond, the first dollar-denominated Eurobond issued by Nigerian bank or company in the global capital market.
The initial $300 million (N38.1billion) was 1.7 times oversubscribed and $350 million (N44.4billion) in orders were eventually allotted. The bond according to our source was priced at an effective yield to maturity of 8.62 percent.
The deal of the year award, according to Azode is being given to GTBank this week at Bahrain in the Middle East, "as Bahrain, an oil-rich country opens its ultra-modern and most impressive Bahrain Financial Harbour, indicative of efficient utilisation of oil money".
"Meanwhile, Standard Bank and Afrinvest were the joint lead managers. Standard Bank was the sole book-runner". Azode noted that Industrial and Commercial Bank of China (ICBC) won the ‘first global deal of the year award’ with its $21.9billion (N2.7trillion) initial public offer (IPO).
"It was a unanimous decision by the judges of The Banker that ICBC’s IPO on the Hong Kong and Shanghai stock exchanges is the world’s largest deal to date. The transaction was most spectacular for a bank that had more than 27 percent non-performing assets about two years ago.
Equally, South Africa’s $1.1 billion (N139.7billion) Kumba Resource Unbundling and Eyesizwe Consortium Black Economic Empowerment Transaction grabbed the ‘regional award for African continent’.
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Saturday, May 5, 2007
Total Nigeria records poor turnover, profit
May 2nd, 2007
Total Nigeria has recorded a no-too impressive turnover and profit after tax for the year ended December 31 2006. Audited results for the period show a turnover of N126.6 billion, slightly lower than the turnover of N126.72 billion recorded in the comparable period of 2005.
Ezenwa Onyeka
Similarly, the petroleum marketer achieved a profit after tax of N2.52 billion down from 30.19 per cent from N3.61 billion in 2005.
This poor performance has reflected on the company’s share price trend. A BusinessDAY study indicates that from November 15, 2004 to March 1, 2007, the company recorded a 4.68 percent drop in share price.
A breakdown shows that from N200.50 per share as at November 15, 2004, the share price fell to N190.00 on October 14, 2005. It went up briefly on July 14, 2006 as investors traded the shares at N192.51 per share. By January 5, 2007, it declined to N188.00 per share. It surged on January 9, 2007, trading at N95.00 per share and remained at the same level for January 11, 2007. By January 18, 2007, the bears took charge again as the share price crashed to N183.99 per share. On January 24, 2007, the equity was transacted at N180.50 per share. February 1, 2007, the share price stood at N185.00 per share. It climbed to N190.00 on February 7, 8 and 9, 2007 respectively. It however lost momentum and declined to N180.50 per share on February 14, 2007. On February 19, 2007, the share price was exchanged at N192.50 per share. For February 20, 2007, the share price of the equity was N189.50 per share. As at February 21, 2007, the share price went down again to N180.06 per share.
It was traded at the same price on February 22 and 23 and rallied on February 26 when it traded at N189.06 per share.
On February 27, investors speculated in the shares at N190.00 per share.
Total Nigeria fared better in earning per share rising from N7.83 in 2004 to N20.91 as at March 5, 2007.
The company paid a uniform dividend of N6.00 to holders of the stock in 2005, 2006, and as March 5, 2007.for 2004, it paid N5.50
A look at the Price Earning Ratio (PER) indicates 25.61 times for 2004, 22.12 times for 2005, and 18.08 times for 2006. As at march 5, 2007, the PER stood at 20.91 times.
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Total Nigeria has recorded a no-too impressive turnover and profit after tax for the year ended December 31 2006. Audited results for the period show a turnover of N126.6 billion, slightly lower than the turnover of N126.72 billion recorded in the comparable period of 2005.
Ezenwa Onyeka
Similarly, the petroleum marketer achieved a profit after tax of N2.52 billion down from 30.19 per cent from N3.61 billion in 2005.
This poor performance has reflected on the company’s share price trend. A BusinessDAY study indicates that from November 15, 2004 to March 1, 2007, the company recorded a 4.68 percent drop in share price.
A breakdown shows that from N200.50 per share as at November 15, 2004, the share price fell to N190.00 on October 14, 2005. It went up briefly on July 14, 2006 as investors traded the shares at N192.51 per share. By January 5, 2007, it declined to N188.00 per share. It surged on January 9, 2007, trading at N95.00 per share and remained at the same level for January 11, 2007. By January 18, 2007, the bears took charge again as the share price crashed to N183.99 per share. On January 24, 2007, the equity was transacted at N180.50 per share. February 1, 2007, the share price stood at N185.00 per share. It climbed to N190.00 on February 7, 8 and 9, 2007 respectively. It however lost momentum and declined to N180.50 per share on February 14, 2007. On February 19, 2007, the share price was exchanged at N192.50 per share. For February 20, 2007, the share price of the equity was N189.50 per share. As at February 21, 2007, the share price went down again to N180.06 per share.
It was traded at the same price on February 22 and 23 and rallied on February 26 when it traded at N189.06 per share.
On February 27, investors speculated in the shares at N190.00 per share.
Total Nigeria fared better in earning per share rising from N7.83 in 2004 to N20.91 as at March 5, 2007.
The company paid a uniform dividend of N6.00 to holders of the stock in 2005, 2006, and as March 5, 2007.for 2004, it paid N5.50
A look at the Price Earning Ratio (PER) indicates 25.61 times for 2004, 22.12 times for 2005, and 18.08 times for 2006. As at march 5, 2007, the PER stood at 20.91 times.
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Friday, May 4, 2007
Unilever Nigeria records 252.52% drop in net profits
The year has not been the best for Unilever Nigeria with the year’s highest at N18.78 and lowest at N12.30 for having added mere N1.21 to sell at N19.99.
MADUKA NWEKE
During the January trading summary the stock selling at N12.50 ended the month at N13.29 making a different of 79 kobo or 6.32 percent increase.
In February, it merely added 46 kobo or 3.46 percent from N13.29 to N13.75 while losing by 4.80 percent or 66 kobo to end at N13.09 from N13.75 recorded the previous month.
With a market price of N19.99 at a turnover of 7.991 million units valued at N162.5million which exchanged hands in 266 deals the stock closed the market on April 27, 2007.
The company, last week submitted its financial year ended December 31 results to the Nigerian Stock Exchange (NSE) which indicated a drop in its bottom line profit.
Analysing the result, it seem that the company may have surrendered to its competitors thereby losing more of its market, going by its N7.83 billion or 23.46 per cent plunge in sales volume. Turnover fell to N25.55 billion in the year 2006, as against the previous year’s N33.39 billion, just as the Robert Clarke-led management reported that the company swam into murky waters within the period with a loss after tax of N2.46 billion. In the year ended December 31, 2005, Unilever Nigeria posted a profit before tax of N2.28 billion.
Loss attributable to shareholders stood at N664.95 million, as against a profit after tax of N1.61 billion reported at the end of the previous year.
Most market watchers expressed fear going by the dwindling form the company degenerated to. For example, Unilever Nigeria reported a 31.18 per cent slump in its third quarter turnover, which stood at N16.93 billion from N24.60 billion in 2005. Also, the company reported a 265.52 per cent drop in net profits to a loss after tax of N2.40 billion from N1.45 billion.
According to management, Unilever’s problems began in the 2005 financial year when inadvertent bans on importation of key raw materials led to frequent supply disruptions. This was followed by dramatic changes in import duties with the overall impact causing costs to increase faster than income. The credit squeeze caused by the banking sector consolidation that ended in 2005 affected the company adversely, as it impacted local suppliers and key distributors. "Liquidity became the issue as distributors’ reduced ability to borrow and to sell out led to increased levels of inventory and debt. During this period, Unilever supported its distributors by extending additional credit which resulted in higher debtors and borrowings. At the end of the year, Unilever’s receivables grew by 258.0 percent to N9.4 billion while overdrafts increased by 354.8 percent to N8.6 billion," explains one analyst in his report.
The effect of the appointment of Bob Clarke who resumed on October 1, last year, to drive the restructuring of the company’s sliding fortunes is yet to be felt, going by the recent result. At the close of trading on Tuesday, the share price of Unilever Nigeria appreciated by 10 kobo, closing at N13.50.
Market capitalization took a N51.95 billion plunge at the close of trading on Tuesday at N5.757 trillion, just as the All-Share-Index at 40,663.76 points caved in by 366.94 basis points or 0.89 per cent, after Nestle Nigeria led others including Ecobank Transnational Incorporated, Benue Cement Company and 7-Up Bottling Company, among others on the laggards side.
Nestle lost by heavier N15.75 than Monday’s 992 kobo, both of which brings its cumulative loss since last week to N46.96. ETI dropped 600 kobo; BCC shed 251 kobo; 7-Up, 245 kobo; African Petroleum, 200 kobo; and UACN, 150 kobo. First Bank closed 140 kobo slimmer; West Africa Portland Company, 121 kobo; Flour Mills, 101 kobo; Cadbury Nigeria and Oando, 100 kobo; Nigerian Aviation Handling Company, 91 kobo; Guinness Nigeria, 85 kobo; Glaxosmithkline Consumer and Nigerian Breweries, 80 kobo; Union Dicon Salt, 72 kobo; Chevron Oil, 50 kobo; and IBTC-Chartered Bank, 49 kobo.
On the gainers’ side Total Nigeria took the lead, adding 200 kobo to Monday’s 198 kobo; followed by CAP’s 143 kobo; RT Briscoe chalked 134 kobo; and Cement Company of Northern Nigeria, 130 kobo. Dangote Sugar Refinery added 104 kobo, closing at N21.87; followed by Mobil Oil’s 100 kobo; Nigerian Bottling Company recovered 90 kobo from its 150 kobo loss on Monday; just as Cappa & D’Alberto grabbed 60 kobo. UACN Property Development Company lost 57 kobo and Nigerian-German Chemicals, 47 kobo.
Transaction volume fell by 57.68 million shares or 13.85 per cent as stockbrokers crossed 358.70 million units worth N3.96 billion in 9,678 deals, as against Monday’s 416.38 million shares valued at N3.82 billion in 9,065 deals.
Diamond Bank was the most active stock in the banking sub-sector, where 181.43 million units were traded for N2.67 billion in 5,225 deals. Diamond Bank’s 35.75 million shares changed hands for N382.59 million units in 37 deals, while investors staked N159.31 million for 31.63 million units of Fidelity Bank in 680 deals. In 675 deals, 25.00 million units of Guaranty Trust Bank were exchanged for N854.24 million, just as 18.67 million units of First City Monument Bank were traded in 349 deals for N157.74 million.
In the insurance sub-sector where 76.51 million units valued at N190.56 million in 823 deals, Mutual Benefits Assurance was the most sought after, with 40.02 million shares worth N72.84 million in 60 deals. In 287 deals, 15.66 million units Cornerstone Insurance were traded for N44.54 million in 287 deals.
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MADUKA NWEKE
During the January trading summary the stock selling at N12.50 ended the month at N13.29 making a different of 79 kobo or 6.32 percent increase.
In February, it merely added 46 kobo or 3.46 percent from N13.29 to N13.75 while losing by 4.80 percent or 66 kobo to end at N13.09 from N13.75 recorded the previous month.
With a market price of N19.99 at a turnover of 7.991 million units valued at N162.5million which exchanged hands in 266 deals the stock closed the market on April 27, 2007.
The company, last week submitted its financial year ended December 31 results to the Nigerian Stock Exchange (NSE) which indicated a drop in its bottom line profit.
Analysing the result, it seem that the company may have surrendered to its competitors thereby losing more of its market, going by its N7.83 billion or 23.46 per cent plunge in sales volume. Turnover fell to N25.55 billion in the year 2006, as against the previous year’s N33.39 billion, just as the Robert Clarke-led management reported that the company swam into murky waters within the period with a loss after tax of N2.46 billion. In the year ended December 31, 2005, Unilever Nigeria posted a profit before tax of N2.28 billion.
Loss attributable to shareholders stood at N664.95 million, as against a profit after tax of N1.61 billion reported at the end of the previous year.
Most market watchers expressed fear going by the dwindling form the company degenerated to. For example, Unilever Nigeria reported a 31.18 per cent slump in its third quarter turnover, which stood at N16.93 billion from N24.60 billion in 2005. Also, the company reported a 265.52 per cent drop in net profits to a loss after tax of N2.40 billion from N1.45 billion.
According to management, Unilever’s problems began in the 2005 financial year when inadvertent bans on importation of key raw materials led to frequent supply disruptions. This was followed by dramatic changes in import duties with the overall impact causing costs to increase faster than income. The credit squeeze caused by the banking sector consolidation that ended in 2005 affected the company adversely, as it impacted local suppliers and key distributors. "Liquidity became the issue as distributors’ reduced ability to borrow and to sell out led to increased levels of inventory and debt. During this period, Unilever supported its distributors by extending additional credit which resulted in higher debtors and borrowings. At the end of the year, Unilever’s receivables grew by 258.0 percent to N9.4 billion while overdrafts increased by 354.8 percent to N8.6 billion," explains one analyst in his report.
The effect of the appointment of Bob Clarke who resumed on October 1, last year, to drive the restructuring of the company’s sliding fortunes is yet to be felt, going by the recent result. At the close of trading on Tuesday, the share price of Unilever Nigeria appreciated by 10 kobo, closing at N13.50.
Market capitalization took a N51.95 billion plunge at the close of trading on Tuesday at N5.757 trillion, just as the All-Share-Index at 40,663.76 points caved in by 366.94 basis points or 0.89 per cent, after Nestle Nigeria led others including Ecobank Transnational Incorporated, Benue Cement Company and 7-Up Bottling Company, among others on the laggards side.
Nestle lost by heavier N15.75 than Monday’s 992 kobo, both of which brings its cumulative loss since last week to N46.96. ETI dropped 600 kobo; BCC shed 251 kobo; 7-Up, 245 kobo; African Petroleum, 200 kobo; and UACN, 150 kobo. First Bank closed 140 kobo slimmer; West Africa Portland Company, 121 kobo; Flour Mills, 101 kobo; Cadbury Nigeria and Oando, 100 kobo; Nigerian Aviation Handling Company, 91 kobo; Guinness Nigeria, 85 kobo; Glaxosmithkline Consumer and Nigerian Breweries, 80 kobo; Union Dicon Salt, 72 kobo; Chevron Oil, 50 kobo; and IBTC-Chartered Bank, 49 kobo.
On the gainers’ side Total Nigeria took the lead, adding 200 kobo to Monday’s 198 kobo; followed by CAP’s 143 kobo; RT Briscoe chalked 134 kobo; and Cement Company of Northern Nigeria, 130 kobo. Dangote Sugar Refinery added 104 kobo, closing at N21.87; followed by Mobil Oil’s 100 kobo; Nigerian Bottling Company recovered 90 kobo from its 150 kobo loss on Monday; just as Cappa & D’Alberto grabbed 60 kobo. UACN Property Development Company lost 57 kobo and Nigerian-German Chemicals, 47 kobo.
Transaction volume fell by 57.68 million shares or 13.85 per cent as stockbrokers crossed 358.70 million units worth N3.96 billion in 9,678 deals, as against Monday’s 416.38 million shares valued at N3.82 billion in 9,065 deals.
Diamond Bank was the most active stock in the banking sub-sector, where 181.43 million units were traded for N2.67 billion in 5,225 deals. Diamond Bank’s 35.75 million shares changed hands for N382.59 million units in 37 deals, while investors staked N159.31 million for 31.63 million units of Fidelity Bank in 680 deals. In 675 deals, 25.00 million units of Guaranty Trust Bank were exchanged for N854.24 million, just as 18.67 million units of First City Monument Bank were traded in 349 deals for N157.74 million.
In the insurance sub-sector where 76.51 million units valued at N190.56 million in 823 deals, Mutual Benefits Assurance was the most sought after, with 40.02 million shares worth N72.84 million in 60 deals. In 287 deals, 15.66 million units Cornerstone Insurance were traded for N44.54 million in 287 deals.
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Zenith Bank displaces Dangote Sugar as most capitalised company
Dangote Sugar Refinery Plc has lost the position of the most capitalised company quoted on the Nigerian Stock Exchange to Zenith Bank Plc.
DSR, which was listed in March at N18 per share, became the stock with the highest market capitalisation in April due to a consistent rise in its price.
The stock rose from N18 to N56, amounting to a market capitalisation of N560bn two weeks ago.
However, the bears swooped on the company in a bid to reap part of the capital growth. As a result, the high supply depressed it to close at N43.04 per share on Monday and translated into a capitalisation of N430bn.
This has made Zenith Bank, which had been occupying the second position since April 19, the company with the highest market capitalisation with N461bn.
Consequently, First Bank of Nigeria Plc, which occupied the number one position before DSR took over, fell to the third place with about N420bn.
The reduction in the capitalisation of DSR has been attributed to profit takers, while Zenith Bank�s positive outing was due to consistent demand for the stock.
The Managing Director, Mission Securities Limited, Mr. Samuel Oguntayo, had said that the rising profile of Zenith Bank was expected, given its nine months results and other positive developments.
The bank posted profit before tax of N17.64bn for the nine months ended March 2007, indicating a 59 per cent increase over the N11.08bn recorded for the same period in 2006. Profit after tax rose by 69 per cent from N8.86bn to N15bn.
The stock has recorded price gains of almost 150 per cent within the past year and is one of the most actively traded.
Since the public offer of early last year, Zenith has risen gradually from N16.90, to close at the current price, representing a capital appreciation of about 193 per cent.
Apart from the capital appreciation, investors who bought into Zenith Bank have also reaped from the dividend payout in line with the bank�s promise to pay N6.6bn dividend or N1.10 per share.
Analysts believe that the capital appreciation of almost 193 per cent and the impressive nine-month results were indicative of what to expect when the full year result is announced at the close of the bank�s financial year in June 2007.
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DSR, which was listed in March at N18 per share, became the stock with the highest market capitalisation in April due to a consistent rise in its price.
The stock rose from N18 to N56, amounting to a market capitalisation of N560bn two weeks ago.
However, the bears swooped on the company in a bid to reap part of the capital growth. As a result, the high supply depressed it to close at N43.04 per share on Monday and translated into a capitalisation of N430bn.
This has made Zenith Bank, which had been occupying the second position since April 19, the company with the highest market capitalisation with N461bn.
Consequently, First Bank of Nigeria Plc, which occupied the number one position before DSR took over, fell to the third place with about N420bn.
The reduction in the capitalisation of DSR has been attributed to profit takers, while Zenith Bank�s positive outing was due to consistent demand for the stock.
The Managing Director, Mission Securities Limited, Mr. Samuel Oguntayo, had said that the rising profile of Zenith Bank was expected, given its nine months results and other positive developments.
The bank posted profit before tax of N17.64bn for the nine months ended March 2007, indicating a 59 per cent increase over the N11.08bn recorded for the same period in 2006. Profit after tax rose by 69 per cent from N8.86bn to N15bn.
The stock has recorded price gains of almost 150 per cent within the past year and is one of the most actively traded.
Since the public offer of early last year, Zenith has risen gradually from N16.90, to close at the current price, representing a capital appreciation of about 193 per cent.
Apart from the capital appreciation, investors who bought into Zenith Bank have also reaped from the dividend payout in line with the bank�s promise to pay N6.6bn dividend or N1.10 per share.
Analysts believe that the capital appreciation of almost 193 per cent and the impressive nine-month results were indicative of what to expect when the full year result is announced at the close of the bank�s financial year in June 2007.
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