Nigeria Content Online

Port Harcourt City
local government area of Rivers State has trained more than 300 youth
in different skills, the chairman, Azubuike Nmerukini, said.

Mr. Nmerukini said
at the weekend that the youth received training for more than six
months in welding, carpentry, hairdressing, Information Communication
Technology, fashion, and design.

He said the council
would give the trainees take-off grants, adding that work on the
council’s skill acquisition centre had reached an advanced stage and
would be used to train future trainees.

“The aim is to make
them self-reliant or employed and thereafter train others from their
communities to be self-employed. The local government thought it wise
that in any society, everybody must not be a pen pusher and as such, we
set up skill acquisition programmes,” he said.

The
assets recovered from Cecilia Ibru, the former chief executive officer
of Oceanic Bank, one of the banks found insolvent after the Central
Bank’s special audit last year, would help in refunding the bailout
funds injected into the bank by the CBN and help recapitalise the bank,
the Central Bank said at the weekend.

Mrs.
Ibru was last Friday convicted and sentenced to six months imprisonment
on a three-count charge of negligence, reckless grants of facilities
running into billions of dollars, and mismanagement of depository funds
by a Federal High Court sitting in Lagos. She is also to forfeit assets
and shares, contained in a schedule submitted to the court, worth N191
billion.

The
head, corporate affairs department of the bank, Mohammed Abdullahi,
also said the Asset Management Company would help manage the recovered
assets.

“As
you know, by the order of the court, the assets confiscated from Mrs.
Ibru will be transfered to and managed by the Asset Management
Corporation (AMCON) who will take the necessary steps,” Mr. Abdullahi
said.

“The
role of the AMCON is to assist in the recapitalication of the banks by
absorbing some of the toxic assets found to have been responsible for
the problems faced by the banks we had to intervene in,” he added.

Mr.
Abdullahi said the decision of the court regarding the transfer of the
assets to AMCON is clear. He said proceeds from whatever assets AMCON
would get “will now form part of the funds that are expected to be
refunded by the bank to the Central Bank, speaking specifically on the
N100 billion that was injected into the bank by the Central Bank last
year. We also believe that the assets should also assist in the
recapitalisation of the bank, to survive its present challenges.”

According
to him, the Central Bank is pleased with the decision of the court and
believes it is a vindication of the examination results of the special
audit carried out by the Central Bank and the Nigeria Deposit Insurance
Corporation (NDIC).

“We
are very happy that this decision has taken place, and it is a pointer
regarding what to expect as the determination of the Central Bank to
cleanse the banking sector and ensure that corrupt practices are not
only prevented from happening, but that those found responsible are
made to face the law, rather than walk away freely with their loot,” he
said.

Outstanding court cases

The
Central Bank’s spokesperson said the outstanding court cases are being
vigorously pursued by the EFCC, and a prosecution team has been set up
to handle the cases.

“Based
on the fact that the same examination conducted by the NDIC and the CBN
found similar infractions against those that are still in court, we are
hoping that the cases would take their due course and at the end of the
day, all the other MDs would face the music in the same way that Mrs.
Ibru is facing hers now, if they are found guilty,” he said.

Significance of the ruling

The
Central Bank said the significance of this decision on the ongoing
banking reforms is the vindication of the Central Bank and the NDIC.

“In
the process of these reforms, the Central Bank and its leadership have
been accused of regional, religious and even personal agenda, as
reasons for embarking on these reforms. This ruling has, therefore,
made a lie of all the allegations.

“I
also believe that it has given an impetus to the dedication of the
leadership of the Central Bank to ensure that depositors funds are
protected and all those who dipped their hands into funds given to them
on trust would never get away, but would face the music, no matter
their position in the society,” Mr. Abdullahi said.

A rising Kenyan
import bill is an important factor behind increased central bank dollar
buying and there is no intention to intervene to influence the value of
the shilling, the head of the central bank said on Saturday.

Foreign exchange
dealers have grumbled that fundamentals dictate the shilling should be
stronger, but that central bank purchases of foreign currency have
capped its gains.

“Dollar purchases
are to protect reserves and to build up reserves, not just for fun,”
central bank governor, Njuguna Ndung’u told Reuters on the sidelines of
the International Monetary Fund and World Bank meetings in Washington.

“Our import bills have risen significantly to slightly over $1
billion a month, so it means that keeping four months of import cover
means being in the neighbourhood of $4 billion,” Mr. Ndung’u said.

Urban consumer
inflation in Egypt inched up to 11.0 percent in the 12 months to
September, from 10.9 percent in the year to August, the state-run
CAPMAS statistics agency said on its website on Sunday.

Nine analysts
forecast an average of 11.12 percent for urban inflation – the most
closely watched indicator of prices. Forecasts ranged from 9.6 percent
to 12.9 percent.

African states
rebounding from the global downturn are far better placed than in the
past to ensure currencies do not become overvalued and damage
competitiveness, a top World Bank official said on Saturday.

World Bank managing
director, Ngozi Okonjo-Iweala, said, however, that rising capital
inflows could become a concern as African countries attract more money
from short-term investors seeking higher returns.

Global currency
tensions are at the center of discussions at meetings of the
International Monetary Fund and World Bank in Washington this weekend.

“The continent has
implemented remarkably sensible policies. Fiscally, they’ve been
responsible. Exchange rate management has been reasonable. People have
learned the lessons of overvaluation in the past,” Okonjo-Iweala told
Reuters.

Performances on the
floor of the Nigerian Stock Exchange (NSE) during the week were mixed,
as the NSE All-Share Index (ASI) had three bullish days and two days
bow to the bear’s call. The bull(s) return during the previous week was
strong and boosted investors’ portfolio to appreciable profit levels.
This in-turn led to short profit taking activities, which saw the
market down between the third and fourth trading day of the week.

In all, NSE ASI
wrapped up the week slightly above the opening point by 3.17% or 721.81
points to close at 23,772.40 points, from 23,050.59. Market
capitalization closed at N5.825 trillion.

Four of the five
sectoral indicators closed the week above their various opening
figures. NSE-Food/Beverages were up by 17.28 points or 2.43% and close
with 735.30. NSE-Banking appreciated by 17.35 points or 5.2%,
NSE-Insurance headed north by 13.63 points or 9.3% at 154.87.

NSE 30 gained 30.54 points or 3.19% to close at 1,007.34, while NSE-Oil/Gas dipped by 4.96 points or 1.51% to close at 154.87.

Activities review

The stock market
recorded a turnover of 2.05 billion shares valued at N18 billion. The
said volume was moved in 28,785 transactions. The banking sector top
volume performance with 1.15 billion shares that were boosted by volume
on the shares of Diamond Bank, Access Bank, Guaranty Trust Bank, First
Bank of Nigeria Plc, and First City Monument Bank Plc. The insurance
subsector followed on the performance chart with 372.43 million shares
traded in 971 transactions.

The 47 stocks that
appreciated traded a total of1.277 billion shares, same as 62.33% of
market volume, 31 equities dipped and they moved 325.58 million units
of shares that accounted for 16% of total volume traded on all equities
through the week. Meanwhile, 123 companies ended the week’s
transactions on a flat note; volume traded by those stocks is
equivalent to 21.78% of the total market volume.

Technical view

R-squared, a
measure of portfolio performance, is currently at an extreme low. This
indicates that there is no strong trend in-tact. This value should
increase soon. When it does, there is likely to be a new short term
trend. The current slope of the close is positive, moving higher,
indicating strength of the medium term uptrend.

The standard error
is 565.237; at this level, there is much higher than normal volatility
around the current trend and traders are probably not in general
agreement, not allowing the indicator to trend easily. The price is
probably not following the regression slope well.

Report on the OTC market for FGN Bonds

A total turnover of
248.9 million units valued at N243.41 billion in 1,940 deals was
transacted last week, in contrast to a total of 332.8 million units
worth N317.95 billion exchanged in 2,864 deals during the week ended
Wednesday, September 29, 2010.

The most active
bond (measured by turnover volume) was the 10.00% FGN July 2030 series,
with a traded volume of 44.9 million units valued at N37.78 billion in
383 deals. This was immediately followed by 10.5% FGN May 2012 series,
with a traded volume of 43.3 million units valued at N46.65 billion in
388 deals.

Seventeen (17) of
the available thirty-six (36) FGN Bonds were traded last week, compared
with eleven (11) recorded a fortnight ago.

Corporate actions reported in the week ended

In the week under
review, the market witnessed avalanche of reported audited results for
belated period ended December 31, 2010. Few were for the periods ended
March 31, 2010 (Neimeth Int’l Plc & Chellarams Plc) and July 31,
2010 (Ellah Lakes Plc).

These results were
released in an effort to beat Nigerian Stock Exchange (NSE) hammer on
quoted companies that are yet to report their audited results for
period ended December 31, 2009. Analysis of few of the results is shown
below, while lead operations figures are reflected in the table below.

NIEMETH INT’L PLC

Neimeth Int’l Plc,
a healthcare company with specialty in production and marketing of
pharmaceutical products released its Q4 results for FY ended March 31,
2010.

Close observation
and computations of figures revealed that the company remained in the
wood. Gross revenue (TO) only managed a fractional growth of 1.2% at
N1.89 billion, against N1.87 billion in comparable period 2009.

On the profit line,
all other indicators returned negative figures. Both PBT and PAT
declined by 71% and 72.3% respectively. This resulted to negative
earnings, meaning the company will recourse to its reserve to finance
its major activities in the current fiscal year (2010/2011). Figures
computed at this instance were: loss per share (LPS) 7 kobo, loss
(profit) margin of 6.67%.

Shareholders’ equity equally lost 11.3% from N1.072 billion, in a similar period 2009.

Observation: This is a poor corporate performance. It has been consolidated for the second time in a row.

Dividend payment will not be considered here. We do not expect price appreciation on this stock in meantime.

STACO INSURANCE PLC

Indemnity covering
company, Staco Insurance Plc, joined league of companies that made
their corporate files available in the market last week. Though this
belated Q4 report saw manageable growth at the top line, it turned
mixed and docile at the bottom line. Turnover recorded improved growth
of 15.6% at N5.06 billion over N4.38 billion posted in similar period
2008.

Profitability
indexes returned lower figures, compared to 2008. PBT dipped by 13.6%
at N538.41 million, so was PAT with 20.1% dip over N546.42 million in
2008. As the bottom lines dipped, computed earnings ratios equally
reflected lower figures. EPS lost 25% of its 10 kobo in FY 2008 at FY
2009’s 8 kobo. This resulted to earning yield of 16%.

PE multiple of 6.25 appears attractive. Return on stakeholder equity (ROE) is 9% while profit margin stood at 8.6%.

Observation:
Performances wise, bottom lines fared poor against FY 2008 figures.
Recall that in FY 2008, the company paid 2 kobo and 1 for 10 bonus
incentive. If at all anything will be paid here, it will be cash
dividend. But the directors have not disclosed anything yet.

The stock looks attractive at its current price, only that the insurance industry remains a skeptic zone for now.

In the four years
to 2003, output growth in Nigeria averaged about 4% (then considered a
significant increase on the 2.8% rate of growth recorded in the 1990s).
Some of this increase came from a more stable environment, as the
economy adjusted to the new democracy. With a parliament looking over
the shoulders of the executive arm of government, most economic units
were at least assured that the policy environment was going to be less
volatile than was the case under the opaque workings of military rule.

Therefore, even in
the absence of new entrepreneurial effort, growth could and did feed
off the new optimism. Still, this was nowhere near the dividends we had
been told would accrue to us from the transition to democratic rule.
The NEEDS document duly argued in 2005, that in order to reduce poverty
in the country, the economy had to grow by “at least 7-8% annually”.

This was before a
rash of reforms by the Obasanjo administration boosted entrepreneurial
activity in certain sectors of the economy. The telecommunications
sector is arguably the poster child of that period. By the time the
Obasanjo administration left office, the NEEDS growth target had been
breached.

But instead of the
new growth levels being driven by inflows of new capital and investment
funds, revenue over-performance (with oil prices nudging new highs)
drove the new output levels.

A democratic
caudillo imposed his will on fractious sub-national governments, and
through the “excess crude account” threatened to address the volatility
that has dogged public expenditure management in the country, since the
economy became addicted to crude oil-based revenues. Unfortunately, the
absence of policy coherence between sub-national political units and
the government at the centre required institutional responses, if the
national plan and budgeting processes were to have any meaning.

It is fair to
assume that at some point, the Obasanjo administration reached its
frontiers as an agent of reform, for even it could not find the
political will to follow through the logic of its new policy choices.
Ought the electorate to hold this failure against that government? Yes;
and no!

Yes, because owing
to the popular nature of the processes by which that government came
into office, even the stars were aligned in its favour. The people were
worn to the bone from the epic effort that was needed to oust the
military. The “forces of reaction” were even worse off. With their
backs to the wall, we awaited with baited breath our new government’s
administration of the coup de grace. This didn’t happen, however,
because the Obasanjo administration was handicapped by a congenital
defect. The selfsame circumstances of its birth were a real and present
constraint.

Thus, we were still
waiting for the telling blow to the interest groups whose choices had
held back the commonweal for decades, when the Yar’Adua government
assumed office. Upside claims for this administration notwithstanding,
it remains something of an enigma. History may yet judge it well, but
it only managed stasis everywhere.

Bereft of a real
change agenda, it was able to maintain growth rates at the 7% level
reached by the Obasanjo administration only by drawing down on the
savings set aside by the latter. The more ravenously it dipped into the
pool of savings, the more aggressively it drove up government
consumption as a share of domestic output; and at the expense of both
private consumption, and investment by businesses in expanding or
building new capacity.

Consequently, we
have had four years of growth without new jobs being created. Nothing
wrong with all of these in a democracy. If nothing else, the four-year
cycle affords the electorate the opportunity to turf out perspectives
that they find incongruent with their needs.

Surprising
therefore, that the stories coming out of the campaign headquarters of
would-be candidates in next year’s presidential elections
unconscionably rehash old platitudes. From IBB, through Nuhu Ribadu, to
Goodluck Jonathan, we hear of projects to return Nigeria to its past
(?) glory.

Nothing, alas, is
said about the particulars of these projects. How much of it would be
because of new funding initiatives in education? How much because we
would be investing in new infrastructure? And how much because we would
change the way government is run?

How would the projects be sequenced? And where will the much-needed funding come from? Not a squeak from anybody!