Nigeria Content Online

JP
Morgan, a United States investment banking and securities firm, has
said it is still managing $500 million of Nigeria’s foreign reserves,
in collaboration with Zenith Bank.

Tosin
Adewuyi, the bank’s senior country officer in Nigeria, said the
collaboration, which has been on since 2006, is still ongoing.

“Zenith
Bank Nigeria joint venture is still very much on. Nothing has changed
since then,” Mr. Adewuyi said at the sidelines of a workshop between
the Nigerian Stock Exchange, the London Stock Exchange, Thomson
Reuters, and JP Morgan, held yesterday in Lagos.

The
Central Bank, in October 2006, gave 14 Nigerian banks, with their
international asset manager partners, $7 billion each, out of the
country’s foreign reserves, to manage on behalf of the country.

The
14 global asset managers and their local counterparts were Black Rock
and Union Bank; J.P. Morgan Chase and Zenith; HSBC and First Bank; BNP
Paribas and Intercontinental Bank; UBS and UBA; Credit Suisse and IBTC
Chartered Bank; Morgan Stanley and GTB; Fortis and Bank PHB; Investec
and Fidelity; ABN Amro and Access Bank; Cominvest and Oceanic Bank; ING
and Ecobank; Bank of New York and Stanbic Bank; and Crown Agents and
Diamond Bank.

Mr. Adewuyi said despite the drop in Nigeria’s foreign reserves, the arrangement still subsists.

Deepening presence

He added that JP Morgan may consider deepening its presence in the country.

“We view Nigeria as a key market for us in Africa. In Africa, pretty much Nigeria comes into number two,” he said.

He, however, said the bank is not considering buying into any of the rescued banks.

“While
we are not purchasing a local bank, we do have relationship with some
of them and helping to build capacity. We don’t run a retail bank in
Nigeria, at least not now. Not to say, in the next two or three years,
we don’t see that as a viable model. But so far, we support banks,
corporations, and government behind the scene internationally,” Mr.
Adewuyi said.

Ibukun
Adebayo, head of primary markets, Middle East, and Africa of the London
Stock Exchange (LSE), said it was collaborating with the Nigerian Stock
Exchange to enhance its development. He said the Stock Exchange has
performed as expected, considering the fallout of the global financial
crisis.

“The
Nigerian Stock Exchange is doing exactly what the London Stock Exchange
is doing, which is keeping interest in the market. We (LSE) get a lot
more support from our regulators. In the UK, we operate under a more
flexible environment. We don’t have rigid rules,” Mr. Adebayo said.

He said LSE operates under codes which need not be rigidly adhered to, provided there is proven effort to comply.

“That
flexible approach to regulation means that we have actually works very
well and that has attracted a number of investments,” he said.

He
explained that unlike Nigeria, investors in the UK capital market have
a responsibility to the companies in which they invest.

“We
have the investors’ stewardship code, which effectively means that
there is covenant between investors. We don’t want you here today and
gone tomorrow. You have to shadow a certain amount of dedication to a
company over a period of time,” Mr. Adebayo said.

This arrangement, he said, helped to mitigate the repatriation of
funds from the UK market during the global financial crisis in 2008.

The minister of
state for commerce and industry, Josephine Tapgun, has urged the Common
Fund for Commodities, an international financial institution
established by the United Nations, to pay more attention to rubber
projects in Nigeria.

She said this on
Tuesday when the organisation’s managing director paid her a courtesy
visit at her office in Abuja. Ms. Tapgun said that the Nigerian
government pays special attention to the organisation activities in
providing support to small scale enterprises and value addition to
commodities in Nigeria.

Ali Mchumo, CFC
managing director, said Nigeria is strategic to CFC programme
actualisation, and that Nigeria has shown political will and was the
only country among members of CFC from Africa that is making
contribution to the fund. Mr. Mchumo added that he hoped that Nigeria
would continue to play an important role in the institution’s
activities.

The courtesy call
was preparatory to the 22nd governing council meeting of CFC, holding
in Abuja. The governing council is the highest decision-making body
within the institution structure of the Amsterdam-based Common Fund,
which finances commodity development projects for small and medium
sized enterprises in commodity production, processing, and trade, in
developing and least developed countries.

The minister, who
also represented vice president, Namadi Sambo, at the opening of the
governing council meeting, expressed concern over the volatility and
instability of commodity markets with less than three percent of total
Official Development Assistance (ODA) to agricultural commodity sector.

She lamented the
continued restriction to market access of commodities from developing
countries to developed countries, and called for the abolition of such
practice. She challenged the World Trade Organisation (WTO) to remain
committed to development, as enunciated in the DOHA Round, with special
attention to the peculiar circumstances on developing and least
developed countries, and adopt an approach that would be fair and
transparent, with respect to trade in agricultural commodities.

The federal
government also promised to assist the CFC and strengthen its future
collaboration, as well as give both moral and financial support to the
organisation. Ms. Tapgun further said that recent economic and
political reforms embarked on by the government have drastically
improved the corporate governance and political climate of the country,
adding that it is not taking for granted the undeniable attraction of
the country to investors, and it is making efforts and striving hard to
improve the economic environment and introduce new incentives.

“We are taking
drastic measure to rebuild, overhaul, and considerably improve our
infrastructure, particularly power supply and transportation, in order
to increase the efficiency of our national economy and decrease the
cost of doing business. We have invested heavily in the provision of
steady power and have launched a road map on power.

“However, to
achieve quick and sustainable results, we are, among other measures,
privatising the provision of power and transport infrastructure,” she
stated.

The stock market recorded a turnover of
1.002 billion shares valued at N9.98 billion in 19,493 transactions.
Recall that the stock market opened for three trading days due to two
days public holidays for the celebration of Eid-el-Kabir. Thus,
Nigerian Stock Exchange All Share Index (NSE ASI) shed 407.88 points or
1.62% from its opening figure of 25,959.95 and closed down at 24,959.95
points. The drop was strictly linked to traders taking short profit
from most of the banking stocks that have returned so much due to
favourable market fundamentals. Meanwhile the market capitalization of
the listed equities closed up at N7.97 trillion.

NSE-30 Index shed 3.21 points or 0.30%
while NSE Banking and NSE-Oil/Gas closed up by 0.01% and 0.80%
respectively and NSE Insurance and NSE Food/Beverages closed in the red
by 1.21% and 0.04% in that order. 50 stocks end the week below their
various opening prices, 35 gained and 118 ends the week on a flat note.
Gaining and Losing equities did 42.86% each of the market volume while
unchanged stock accounted for the remaining 14.28%.

Market outlook

If the market will follow the trend,
then traders should see a recovery during the new week. Ordinarily,
this should come within the first two trading days of the week. Traders
are to watch closely and take strategic positions in adjusting stocks.
Investors are to clearly avoid panic exit, as most equities promise to
hit new highs on recovery.

Juli Plc

Juli Plc was incorporated on September
14, 1972 as a private liability company under the name Juli Pharmacy
Limited to transact the following businesses; Marketing of wholesales
& Retail of Pharmaceuticals, Running of Super-Market &
Laboratory Services.

The company went public through an
offer for subscription on February 10, 1986 and was listed on November
7, 1986 as the first indigenously promoted company in Nigeria to be
quoted on The Nigerian Stock Exchange. Its name was changed from Juli
Pharmacy Plc to Juli Plc on August 22, 1991 to reflect the flexibility
in its marketing strategy.

The company’s affairs are scrutinized
by 7-man board headed by Julius Adelusi-Adeluyi who doubles as the
chairman and chief executive officer. The day-to-day management team is
lead by Oludare Olubamise who holds the office of Managing Director. He
sits upon four other management members.

Juli Plc is listed on the emerging
market section of The Nigerian Stock Exchange. It is one of the few
actively traded stocks in this sub-sector and currently has 178,000,000
ordinary outstanding numbers of shares 100% owned by Nigerians.

Recent corporate performance

The company recently released its Q3
results for the period ended September 30, 2010. A cursory view of the
scorecards revealed that performance was mixed. Sales revenue within
the period dissipated by 12.66% ostensibly high operating expenses.
Sales dipped from N216 million in Q3 2009 to N188.65 million. It had a
tax holiday as such PBT and PAT retained same figure and dipped by
35.45% respectively against Q3 2009 figures. For detail see the table
below.

NOTE: Juli is not a liquid stock and currently sells at N3.05. It is over priced at current position of performance indexes.

Union Bank Nigeria Plc

Directors of Union Bank Nigeria Plc
yesterday reported its unaudited Q3 results for the period ended
September 30, 2010 in the market. Examination on the available figures
showed mixed performance.

It is heartwarming to note that the
stallion bank’s negative bottom line value of N127.89 billion in Q3 ‘09
had returned a profit value of N6.81 billion in Q3 ‘10. It is worth
recalling that the magnitude of the aforementioned loss in Q3 ‘09 was
as a result of colossal provision for bad debt at the instance of CBN.

Interim Q3 revenue dropped by 40% from
N142.62 billion in Q3 ‘09 to N85.57 billion. This was ultimately due to
16.58% slashed in depositors’ fund in the bank. Irrespective of the dip
in revenue, bottom line grew by 105.32% at N6.81 billion to herald
important era in Union Bank. Marginal 0.64% growth in cash and bank
balances showed that UBN was liquid within Q3 ‘10. Major concern on UBN
accounts remains net liability of N244.15 billion in the stakeholders’
equity position. It is expected that the net liability will be wiped
off by the time AMCON picks up UBN’s non-performing loans and existing
margin loans. Loans and advances within the period dropped by 20.96% at
N371.20 billion.

Further analysis revealed that Q3 EPS
stood at 50 kobo against LPS of 947 kobo in Q3 ‘09. At current market
price of N5.00 PE multiple of 10 was computed. The bank recorded a net
loss of 3% in capital employed.

OBSERVATION: The ability of the
management to effectively consolidate on this recovery through
efficient use of human capital and improve service delivery to
customers is a major challenge the bank faces henceforth.

Total Nigeria Plc

The directors of Petroleum Giant, Total
Nigeria Plc had informed the Exchange that it will be paying interim
dividend of N2.00 per share to its shareholders for the period ended
September 30, 2010. Recall that Q3 result was recently reported in the
market. It had an EPS N12.26 and stakeholders’ equity’s return of 50%.
The register of members closes on November 30, 2010 while payment date
is December 13, 2010.

Report on the otc market for FGN bonds

A total turnover of 88.7 million units
valued at N74.68 billion exchanged in 700 deals was recorded last week,
in contrast to a total of 184.43 million units worth N179.78 billion in
1,068 deals during the week ended Thursday, November 11, 2010.

The most active bond (measured by
turnover volume) was the 10.00% FGN July 2030 (7th FGN Bond 2030 Series
3) with a traded volume of 37.6 million units valued at N28.84 billion
in 343 deals. This was followed by 4.00% FGN April 2015 (7th FGN Bond
2015 Series 2) with a traded volume of 19.2 million units valued at
N14.48 billion in 181 deals.

Nine (9) of the available thirty-five (35) FGN Bonds were traded
during the week, compared with twenty-one (21) in the in the preceding
week.</

In what amounts to a vote of no confidence, stockbrokers refused
to authorize council members of the Nigerian Stock Exchange (NSE) to fix the
remuneration of auditors, Akintola Willaims Deloitte.

At the 49th annual general meeting held in Lagos yesterday,
member stockbrokers rejected the report after the accounting firm was unable to
provide satisfactory answers to some of the observation raised.

Trouble started when Okechukwu Unegbu, the Chief Executive
Officer of Maxifund Securities Limited, observed the financial report was not
signed. “My concern is the issue of illegality,” he said. “Mr Chairman, this
account is not signed. It is a legal issue and I want you to consider it
because we may need to get another account.” He added that endorsement by the
firm does not substitute for an individual signature.

Akintunde Odunsi, the Managing Director of Interstate Securities
Limited, said with the investigations into the accounts of the NSE, the
submitted financial report may be altered after the final outcome of the
forensic investigation into the books of the stock exchange. “If the auditors
say investigation is not yet finalised and they are not sure the likely effect
it is going to have on the account, my question is why are we hurrying to have
AGM and not get to the bottom of it so that at the end of the day we know where
we are going,” he said.

Unwilling members

When it was time to receive and adopt the report of council,
financial statement, and report of the auditors, no member was willing to move
the motion. Balama Manu, interim president of the NSE council, while admitting
the unsatisfactory response, however called on members to adopt the motion. “I
will like to say that we seem to have addressed most of the questions not
necessarily to the satisfaction of those who raised them, but I will like to
move ahead by moving formally that the accounts for the year ended December 31,
2009 and report of council, be received and adopted,” he said.

Ebilate Mac-Yoroki, CEO of City Code Trust and Investment Limited, said the
conduct of the auditors was not encouraging. “Most of the answers we have had
are not satisfactory,” he said. “The auditors that have been auditing this
account for a very long time cannot give us the basis for which it is
qualifying just last year’s account. The auditor has no new basis on which it
is qualifying this account.”

It took the intervention of senior stockbrokers to resolve the stalemate
after the interim president compelled a council member, Emmanuel Ocholi, to
second the motion. “In the interest of moving this exchange forward, let’s not
introduce complications. I do not think this is in the interest of the exchange
and by implication, all our stakeholders,” Mr Manu said.

Subsequently, Aigboje Higo, of Capital Bancorp, appealed to his colleagues
to work in harmony in order not to reverse the gains that has been achieved in
the last few months. “The market is sick and tired of us not putting our house
in order,” he said. “I think it will be wicked and callous for investors who
put their money for us to come out again and give stories.” Eventually, the
accounts were adopted.

An economist, Lizzy
Okereke, has urged the Federal Government to establish Micro, Small,
Medium Entrepreneurs (MSMEs) banks in all the 774 local governments
areas in the country.

Mrs. Okereke made
the call on Tuesday at the 37th Annual General Meeting and Conference
of the Enugu Chamber of Commerce, Industry, Mines, and Agriculture
(ECCIMA) in Enugu.

“For Nigeria to
take its proper place as an emerging economic power come the year 2020,
we must not only provide access to credit and in the right places, but
in a sustainable manner,” she said, adding that this was the only way
to speed up the economic development of the nation.

ActionAid Nigeria,
an anti-poverty NGO, on Wednesday, in Abuja, urged the government to
provide more support to smallholder farmers, to avoid food scarcity in
the country.

Tunde Aremu, the
organisation’s policy, advocacy, and campaigns coordinator, made the
call while speaking with the News Agency of Nigeria (NAN).

“Announcement of a
surge in global food prices has huge implications for the world’s
poorest who are already struggling to get enough to eat. ActionAid is
calling on governments to take urgent measures to boost harvests and
protect the most vulnerable against the looming possibility of another
global food crisis,” Mr. Aremu said.

The Federal
Government plans to establish a non-interest (Islamic) bank in the
country, to assist low income earners in the delivery of financial
services at affordable costs.

Umaru Ibrahim,
acting managing director, Nigeria Deposit Insurance Corporation (NDIC),
made the announcement on Wednesday, in Abuja, at a one-day
sensitisation seminar on Non- Interest (Islamic) Deposit Insurance
Scheme.

“It is on record
that one of the ways of alleviating extreme poverty in developing
countries such as Nigeria is the provision of banking services and
adequate credit facilities to vulnerable groups,” he said, adding that
the decision to establish the bank was in consonance with the principle
of financial inclusion.

Kenya’s I&M
Bank said on Wednesday it has received a 2 billion shillings loan from
the Netherlands Development Finance Company (FMO) for onward lending,
especially to small and medium sized companies.

“The lending by FMO
provides a positive signal which will help I&M Bank to bridge the
gap arising out of maturity and foreign currency mismatches, whilst
simultaneously presenting a stable and long term source of foreign
currency funding to meet the growing needs of the market,” the bank
said in a statement.

Kenya’s central bank says commercial lending was up 6 percent in the third quarter to $11 billion.

Senegal plans a
$500 million Eurobond issue for the first half of next year, replacing
the $200 million bond launched last year, the finance ministry said on
Wednesday.

“The borrowing
should be launched in the first half of 2011 and reach the critical
size of $500 million, that will enable it to be listed on the emerging
markets reference indices,” ministry communications adviser, Ousseynou
Gueye, told Reuters in response to inquiries.

The inclusion of an
instrument on the Emerging Markets Bond Index (EMBI) is considered an
advantage, as it improves its liquidity.

The Ugandan
shilling weakened on Wednesday, undermined by dollar demand from
telecoms and energy companies and the euro’s slide against the dollar,
traders said.

At 1037 GMT,
commercial banks quoted the shilling at 2,290/2,295 per dollar, weaker
than 2,285/2,290 at Tuesday’s close. Traders forecast it would trade
within the 2,290-2,297 range in the days ahead.

“I think we will
continue to see a weak shilling. We saw some dollar demand from the
energy and telecom sectors, which depleted what was available in a
market that is short on dollars,” said Faisal Bukenya, head of market
making at Barclays Bank, Uganda.