Nigeria Content Online

The positive trend which dominated the Nigerian Stock Exchange (NSE) since trading sessions reopened this year continued on Thursday, with the market recording a two per cent increase.
At the close of trading, the market capitalisation recorded N167 billion gains to close the day at N8.4 trillion from N8.3 trillion. It had on Wednesday gained over N281 billion.
All the sectoral indexes maintained previous positive outlook as NSE-30, which measures the performance of blue chips in the market, gained by 2.50 per cent; the NSE Oil & Gas gained the highest point by 3.98 per cent; the Banking moved up by 3.07 per cent; Insurance appreciated by 1.65 per cent while the Food & Beverages closed with the lowest score to gain by 0.90 per cent.
Tunde Oladapo-Dixon, chief executive officer, StockPicks Consulting, a stock broking firm, said trading activities are still expected to show oscillatory performances during the year, despite the current rally in the market.
“Market performance will be oscillatory in movement because cautious trading is still expected during the year. When we see the breakdown and implementation of the 2011 budget and the macro access, we will also know the direction of the market because that dictates what happens in any economy,” Mr. Oladapo-Dixon said.
Gainers decline A total of 58 stocks appreciated in price on Thursday, lower than the 69 recorded the previous day, while 14 stocks depreciated in value higher than the 8 of Wednesday.
Total Oil and Nigerian Breweries topped the price gainers’ table with an increase of N11.00 and N3.95 on their opening prices of N223.00 and N79.05 per share. Oando Oil and Flour Mills Nigeria followed in the chart with an increase of N3.51 and N2.00 respectively, to close at N73.86 and N75.00 per share.
Cement Company of Northern Nigeria and Okomu Oil led on the price losers’ chart with a loss of 65 kobo and 40 kobo, to close at N14.71 and N14.80 per share. Vitafoam and Dangote Flour followed with a decrease of 30 kobo and 25 kobo on their initial prices of N6.75 and N17.95 per share.
Banks maintained lead
The Banking subsector maintained its lead as the most active with 565.252 million quantities of shares, valued at N6.7 billion. The subsector’s volume was largely driven by shares of Zenith Bank, followed by Access Bank, First Bank, and UBA.
Trading activities in the Insurance subsector was second highest yesterday, with 41.409 million shares valued at N34.591 million. Volume in the subsector was boosted by deals in shares of Continental Reinsurance, NEM Insurance, and Law Union & Rock Insurance.
The Food/Beverages subsector followed in the chart with 25.276 million shares worth N460.680 million. Dangote Sugar, Dangote Flour, and Tantalizers boosted the subsector’s volume.

Some
bank customers have challenged the Central Bank and commercial banks to
step up the publicity of the account update ordered by the regulator
last November.

The
Central Bank had directed bank customers to update their account
information by December 31, 2010, failing which such accounts would be
suspended with effect from January 1. But on January 3, the Central
Bank extended the deadline to January 31.

Some
banks have sent text messages to their customers while others are yet
to do so. There is, however, a caveat that the accounts of those who
failed to update them will be frozen.

Aduke
Olaide, a bank customer, said she withdrew her entire money from her
bank account so that she could think through the news properly. Another
customer, Femi Adewale, a finance executive with a public relations
firm in Lagos, said he is yet to get an alert from Ecobank but has
received series of text messages from Stanbic IBTC.

“One
thing is sure: this threat cannot work here. I am waiting to see the
person that would tamper with my money in my account. If someone thinks
he can sit somewhere and threaten Nigerians that if something does not
happen, another thing would happen, that must be a big joke,” Mr.
Adewale said.

“The
reason may be tangible, but this method is not it. The highest they can
do is through persuasion. Let people know why they should do that and
what can be achieved if they do so, not to say that some accounts would
be frozen,” he added.

‘We
are doing our best’ While some customers said they are not aware of the
directive, some banks claimed that they are doing their best to get the
information to the public as effectively as they can through their
websites, e-mails, and text messages.

They,
however, expressed reservations about the extended deadline because of
customers who are not in the country and who might not be in the
country before the January deadline.

“A big issue is our customers who are not in the country” a source at Spring Bank said.

“Some
of them don’t even have the course to be in the country in the next few
months, so handling such cases would be challenging. We cannot just
close or freeze their accounts like that without giving these people
adequate time for them to also have their update done. I have a feeling
that the date might still be shifted yet again,” he said.

“Since it is a Central Bank’s idea, they should also participate actively in the enlightenment,” he added.

Mohammed
Abdullahi, the Central Bank spokesperson, neither picked his calls nor
responded to text messages sent to him on the concerns of customers who
are currently out of the country and CBN’s part in enlightening the
public.

Egyptian mobile
operator, Orascom Telecom, said on Thursday its parent company, Weather
Investments, which plans a $6.6 billion deal to sell assets to Russian
operator Vimpelcom, has changed its name.

Weather, the
investment vehicle of Egyptian billionaire, Naguib Sawiris, switched
its name to Wind Telecom on December 30, Orascom Telecom said.

The holding company
agreed to sell controlling stakes in Orascom and Italian operator, Wind
Telecomunicazioni, in October, but opposition from Vimpelcom
shareholder, Telenor, has cast doubt on the deal.

It is now reviewing a revised offer for the assets.

Zambia narrowly
missed its 2010 copper output target due to temporary shutdowns at some
mines but Africa’s top producer was on track to dig out a million
tonnes by 2012, its mines minister said on Thursday.

Maxwell Mwale told
Reuters that 2010 copper output rose to 740,000 tonnes from 697,860
tonnes in 2009, below a 750,000 tonnes target for the year after some
companies briefly halted operations for maintaince.

China Non-Ferrous
Metals Corp. suspended production at its Baluba copper mine in Zambia
from November15 for 45 days to replace its ore hoisting system.

“We managed to
produce 740,000 tonnes of copper against our target of 750,000 tonnes,
but we are still on course to reach one million tonnes by 2012,” Mr.
Mwale said.

“We are ramping up
operations at major operations such as the Konkola Deep Mining project
and that will enable us reach the one million target,” he added.

Mr. Mwale said copper prices were expected to remain high in 2011, giving mining companies the incentive to raise their output.

He also said Zambia was looking for local and international firms to help it explore for copper and other minerals.

Oil prices fell
further from 27-month high on Wednesday as a stronger dollar sapped
investor’s risk appetite for commodities, despite signs of tighter oil
supply fundamentals.

Oil staged a sharp
rally in late December, helping to make the commodity the top
performing asset class in 2010, but prices had since retreated as
investors opted to take profits.

U.S. crude futures
for February fell to an intra-day low of 88.16 dollars a barrel and the
lowest since December 20, 2010 while ICE Brent for February fell 71
cents to 92.82 dollars a barrel.

The U.S. dollar index rose by nearly 0.5 per cent on Wednesday, making oil more expensive for non-dollar buyers.

Losses on Wednesday
came despite data that previously showed a much larger-than-expected
7.5 million barrel drop in crude inventories in the final weeks of 2010.

Cote D’Ivoire’s
main cotton growers’ association trimmed its 2010-11 season production
forecast to 215,000 tonnes from 220,000 tonnes, its executive secretary
said on Thursday.

It marks the second
downward revision since the season started in May, as farmers hoping to
cash in on high world prices reported not receiving seeds normally
distributed by the government as a political crisis drags on.

“We are still in
crisis. The conditions are not ideal,” Christophe N’Dry, executive
secretary of the Cotton Ginners Association told Reuters in an
interview, adding he was also concerned about the 2011-12 season.

He said some 214,410 hectares were cultivated this season instead of the 220,000 hectares previously forecast.

Despite the problems, he said production would still outpace last year’s 185,346 tonnes. “For us, it is enough,” he said.

Cote D’Ivoire has
been in turmoil since a dispute over who won a November 28 presidential
election. The poll was meant to reunite the country after a 2002-03
civil war split it in two, but has instead deepened divisions.

The West African
nation, also the world’s leading cocoa producer, once grew 400,000
tonnes of cotton annually, but the war has left its dry
cotton-producing north in rebel hands.

The Cotton Ginners
Association had initially predicted that the 2010-11 season would yield
250,000 tonnes, but cut that forecast to 220,000 tonnes in August.

N’Dry said he was concerned that the 2011-12 season could be hit hard if the political crisis was not resolved soon.

“We fear for the
next season because of the political situation. Generally, we start in
January to gather seeds and inputs in preparation for the next season.
If the crisis continues, this will be difficult,” he said.

He said that arranging lines of credit with banks to purchase inputs could be hindered by the standoff.

African leaders are
trying to negotiate a solution between incumbent leader, Laurent
Gbagbo, and his rival Alassane Ouattara, both of whom claim to have won
the poll.

Ouattara has the backing of Western powers and African states, but Gbagbo has the support of the national army.

REUTERS

The International
Monetary Fund (IMF) is considering playing more important role in
monitoring cross-border capital flow. The Fund’s executive board at a
meeting held last December 17, noted the growing dominance of capital
flows in international transactions for advanced economies, and
increasingly for emerging economies and the need for closer monitoring.

“Volatile capital
flows played a key role in the recent crisis, both in increasing
vulnerabilities and in transmitting shocks across borders. Considering
the Fund’s mandate to oversee international monetary stability,
directors agreed with the need to strengthen the Fund’s role regarding
international capital flows,” it said on its website.

The Bretton Woods
institution said further that macroeconomic, financial, and capital
account policies designed to address domestic concerns in one country
can have significant effects on other countries by generating or
curtailing capital flows, or acting to divert them to third countries.

“The Fund has an
important role in drawing attention to these potential spillovers, and
the possible implications for the international monetary system as a
whole.” Critical elements of this work include gaining a better
understanding of the key drivers of capital flows and of developments
in global liquidity, and the relationship between the latter, domestic
policies, and global financial stability.

Unhindered capital flows

The move by the IMF
raises questions about how unhindered capital flows and the absence of
proper regulation caused disruption in some emerging economies that
otherwise should have been shielded from the global financial crisis in
2008.

Razia Khan,
Regional Head of Research, Africa, at Standard Chartered Bank, London,
said the global crisis was a failure of regulation.

“Need for improved
financial-sector regulation is seen everywhere. Policy makers have
generally backed off, fearing pro-cyclical consequences of tighter
regulation.” Ms. Khan said unprecedented liquidity creation on the
global scale has led to record capital inflows into emerging markets.
“This led to the ‘discovery’ of Africa as the so-called final credit
frontier,” Ms. Khan said.

She added that the
development of African frontier markets will depend on a favourable
macroeconomic backdrop as well as market liquidity.

The IMF observed
that capital flows have conferred substantial benefits by facilitating
efficient resource allocation across countries, but prolonged episodes
of high volatility have also presented serious policy challenges.

They called for
further work to advance in bilateral and multilateral surveillance and
policy advice for member countries, based on extensive analytical work
and taking into account country-specific circumstances and relevant
experiences.

The IMF would be
collaborating with other institutions, such as the Bank for
International Settlements, the Financial Stability Board, and national
authorities, in meeting this goal.

A major challenge
that the marketing communication industry faces is that of
professionalism. Advertising, Public Relations, Experiential Marketing,
and others are integral components of this industry. It is a thorny
issue that the industry should deal with.

The industry is
threatened with the existence of several so called ‘professionals’ with
little or nothing to offer to enhance growth in the industry. It has
reached the stage whereby anyone with good working knowledge of Corel
Draw is automatically an authority in branding. The case is even more
complicated when they attend any workshop or seminar on branding, as
they immediately become ‘brand consultants’.

Though the
regulatory bodies in the industry have woken up to the reality of the
enormous threat such people pose, this is not enough as drastic
measures should be taken to ensure strict adherence to the rules.

It is disheartening
to note that the industry is not yet regulated like other professional
bodies such as the Institute of Chartered Accountants of Nigeria
(ICAN). There is no way an accountant will practise without being
certified by ICAN or any other professional accounting body. The same
cannot be said of the marketing communications industry. It is now an
all comers affair.

For instance,
advertising faces serious challenges the most. This is due to the
influx of brand mechanics and very soon, we shall have brand
carpenters. The ‘brand experts’ are determined more than before to give
advertising agencies a good fight. To the best of their knowledge and
ability, they have what it takes to make a brand succeed than
advertising agencies.

Separating the wheat from the chaff

There is the urgent
need to separate the wheat from the chaff. I know some advertising
professionals who have honed their skills by studying more about
branding. A good reference point here is Joko Okupe, a renowned
professional who spent years in South Africa gaining more in-depth
knowledge about branding.

My grouse here is
with people who have no pedigree and suddenly became brand experts
overnight. These are the same set of people taking undue advantage of
the industry.

I believe in the
innate potentials of Lolu Akinwunmi as the chairman of APCON. Mr.
Akinwunmi’s appointment at a time like this should bring sanity to the
profession.

For several years,
owners of advertising agencies have only been after their pecuniary
interests. This is indeed a time that the leaders should look back and
take a closer look at the kind of legacy they are bequeathing to the
industry. It has become imperative to harness strengths and potentials
and chart a new way forward for the industry. The leaders should eat
the humble pie and learn from what Kenny Badmus, the brain behind
Orange Academy, has done.

This is a young man
who put his talents into good use by developing a new generation of
creative professionals for the industry. Orange Academy stands tall
above all the established agencies, as none had such vision to uplift
the industry and leave a lasting legacy. The Academy has become a
breeding ground for a distinct set of young minds who in the nearest
future will take the industry by storm.

Some advertising
agencies are globally affiliated but beyond the technical benefits of
such affiliations, what have been the tangible contributions of such
affiliated agencies to the development of the profession in Nigeria? We
have such respected names as FCB, Ogilvy, Leo Burnette, etc. But what
are our own agencies doing to retain their names, decades after
establishments?

A senior colleague
met me in a banking hall the other day and was shocked that leading
agencies are the major defaulters in paying professional dues to AAAN.
Is this not a cause for concern? Why would all sorts of people not
spring up and lay claim to the industry when the leaders are not living
up to desired expectations?

This is indeed a
clarion call to all and sundry to do the right thing at the right time.
It is only then that the menace of unbaked and unripe people will stop
masquerading as professionals.

New Year wishes

I sincerely
appreciate all readers of this column for their support, critique, and
contributions in the last one year. I wish all the best this new year
and may all your dreams come true.

Ayopo, a
Communication Strategist and Public Relations Specialist is the CEO of
Shortlist Limited email-shortlistedprspecialists@gmail.com

Banks
have been asked to stop excessive provisioning for non performing loans
in their books as the Asset Management Corporation will buy the rescued
banks loans and also the margin loans of other banks, say some finance
experts.

“With
the execution of this transaction, (a three year zero coupon
consideration bonds) non performing loans concerns across the banking
sector have got a major relief. This clearly lays to rest the days of
provisioning surprises, as the full participation of the banks in this
process cements the days of troubled past,” says Adesoji Solanke, an
equity research analyst at Renaissance Group, an investment banking
firm.

Mr. Solanke added that the sector is expected to be more focused this year, with its non performing loans taken care of.

“We
welcome revamped lending practices and a more defined business focus in
the sector, and see moderate, sustainable, and higher quality earnings
dotting the sky line in the next few years,” he added.

The
non performing loans acquired from the cleared banks (margin loans)
stands at N167 billion, which represents 8.6 per cent of the total non
performing loans acquired today, while the balance 91.4 per cent or
N1.78 trillion came from the troubled banks.

Banks comparative stock performance

Despite
the challenges faced by the banks and the burden of non performing
loans they had to bear, experts say the sector performed relatively
well at the stock market, except for a few.

“The
Nigeria Stock Exchange All Share Index (NSE ALSI) closed 18.93 per cent
up, effectively bucking a two-year bleeding trend. Nigerian banks
played a huge part in this return to the greens, with 76 per cent of
listed banks posting positive (Year to date) YTD returns compared to
just 13 per cent in 2009,” a report from Renaissance Capital stated.

“Sterling
Bank was the sector’s jewel, posting an 88 per cent year to date climb,
coming on the back of a 49 per cent dip in 2009. Skye Bank followed
with a distant 60 per cent (YTD) rise. On the flip side, Ecobank
Nigeria was the poster boy, as it emerged the worst performing stock
amongst the cleared banks for the second consecutive year – 62 per cent
in 2009 and 66 per cent in 2010,” it further said.

According
to the report, First Bank and UBA, alongside Union Bank and Afribank,
all recorded a second year of year to date losses. Oceanic, Unity, and
Wema banks also did well, with average YTD gains of 43 per cent and
only GTBank, Access Bank, and FCMB posted their second consecutive year
of positive YTD performance.

Ecobank
declined to speak on why the bank emerged the worst performing stock
amongst the cleared banks for the second consecutive year, as the
corporate affairs official said he was not in the position to speak on
investment performance matters on behalf of the bank and that the
person authorised to speak on the issue was not available.

A source at the bank, however, said a number of issues may have caused the poor performance of the stock.

“You
know that dividends are among things that actually push stock
performance in the market. Investors may say that dividends have not
been regular.

“Besides,
once you have a parent company, there is the tendency that investors
would prefer investing in the parent company, ETI, than in Ecobank
itself,” the source said.