Nigeria Content Online

Trading activities at the Nigerian Stock Exchange (NSE) opened the week on a negative note as the market could not sustain the positive performance recorded last Friday.

At the close of Monday’s trading, the NSE market capitalisation, which gained N10 billion on the last trading day, depreciated by N39 billion to close at N5.901 trillion from N5.940 trillion. This reflects a decline of 0.65 percent. The Exchange’s All-Share Index was also down by 0.65 percent or a decline of 156.69 units, from 24,241.84 basis points to 24,085.15.

Analysts at Resource Cap, a portfolio management company, said the downturn trend could be attributed to the weak investors’ sentiments in the market.

Also, Equity Research team at Proshare Nigeria, an investment advisory firm, said, “The current trend stands as manifestation of uncertainties and issues that pervaded market last month, coupled with low liquidity and unwillingness of investors.”

However, they said the planned listing and merger of the Dangote Cement Group with an estimated valuation of N2 trillion “should impact the market capitalisation and serve as an encouragement for attracting telecom and energy sector firms to the exchange.”

Low gainers

At the close of Monday’s trading, a total of 17 stocks appreciated in value, lower than the 34 stocks recorded last Friday; while 33 stocks depreciated in value, higher than the preceding day’s 31.

African Petroleum and Guinness Nigeria topped the price gainers’ table with an increase of N1.56 and 90 kobo on their opening prices of N31.26 and N164.10 per share respectively. On the flip side, Nigeria Breweries and Benue Cement Company led the price losers’ chart with a loss of N2.63 and N1.94, to close at N69.75 and N63.06 per share respectively.

The banking subsector maintained its lead as the most active with 80.513 million quantities of shares, valued at N610.772 million, as against the 141.00 million units valued at N1.07 billion recorded on Friday. The subsector’s volume was driven by shares of Guaranty Trust and First Bank.

The maritime subsector was second in the chart with 51.371 million shares worth N62.300 million. The subsector’s volume was largely driven by Japaul Oil & Maritime Services. Trading activities in the insurance subsector followed, with 33.193 million shares valued at N42.448 million. Volume in the subsector was boosted by deals in shares of Law Union and Rock Insurance, Custodian and Allied Insurance, and Equity Assurance.

Meanwhile, the Exchange’s management, on Monday, marked down the price of University Press for a dividend of 40 kobo per share and a bonus one for every five owned by its shareholders. The dividend payment date is 30th of September 2010. Also, the price of NEM Insurance was marked down for a dividend of 4 kobo, while payment date is 12th of October.

At the trading floor yesterday, Seven-Up Bottling Company presented an audited financial result for the year ended March 31st, 2010. The result shows a 17.80 percent increase in turnover, from N34.864 billion to N41.069 billion; and an increase of 23.70 percent in profit after tax, from N1.529 million to N1.892 million.

The company’s board of directors proposed a dividend of N1.75 kobo per share and a bonus of one for every four owned by its shareholders.

President Goodluck Jonathan has inaugurated the governing council of the Nigerian Content Development Board, with a charge to reposition the petroleum sector for the benefit of the nation.

The president had in April this year signed into law the Nigerian Oil and Gas Content Development Act, which provides for the development and use of Nigerian content in the operations and transactions of the oil and gas industry. He explained that the NOGICD Act, which he signed into law on April 22, 2010, created the NCDMB with a professional governing council and this can propel Nigeria into becoming one of the world’s industrialised economies in the next decade.

Shortly before inaugurating the board at the council chambers of the presidential villa, Mr. Jonathan said the country is aware of the limitations of capacity in manufacturing for the upstream and downstream operation, unlike in other economies where the application of local content has stimulated investments that transformed their economies, hence the enactment of Nigeria’s own local content law.

“We must drive the implementation of this law in a manner that develops partnerships between local and international companies and government and the private sectors of the economy, including local banks, global financing institutions, manufacturing, agriculture, and educational and research institutions should be exhaustively explored,” the president said to the governing council.

He further urged them to enhance the supply chain management and efficiently integrate such government programmes as SME development PTDF, Industrial Training Fund, and the National Office for Technology Acquisition and Promotion (NOTAP) initiatives to build local capacities. This, he noted, “will serve as a vehicle for transferring the technological experience inherent in the oil and gas industry to other critical sectors”.

While government is working at building these synergies, “Nigerians must step up to take up the challenge of participation,” he said.

“We must embrace a new ‘I can do’ spirit in pursuit of the high quality and global standards of performance required in the oil and gas industry. We have to reenact the same level of commitment that has seen our telecom and banking sector reforms noteworthy successes.”

Inaugurating the council, he charged them to make all these aspirations of government a reality.

“As the pioneering governing council of and implementation authority for this law, you have the opportunity of repositioning the industry for the benefit of our country. You cannot afford to fail in this important national assignment”, he told them.

In her speech, the petroleum resources minister , Mrs. Alison-Madueke, noted that effective implementation of the Act will ensure that the Nigerian economy will, within the next four years, retain over $10 billion out of an average annual oil & gas industry expenditure of $20 billion, compared to the current sum of less than $4 billion. She added that “successful implementation of the Act will create over 30,000 direct employment and training opportunities, considering the scale of activities to be domiciled in Nigeria.”

She also expressed hope that the industry will witness the development of one or two dockyards and increased utilisation of existing shipyards for maintaining marine vessels operating in Nigeria, which currently sails out for their maintenance and dry docking. According to her, there will also be the “transformation of ownership profile of marine assets supporting industry activity from a current ratio of 20 Nigerian-owned, as against 280 foreign-owned vessels to a more equitable ratio of 180:120.”

The governing council has a four-year tenure and is chaired by the minister of petroleum resources, Mrs. Diezani Alison-Madueke. Other members are Mr. Shawley Coker, representing Petroleum Technology Association of Nigeria, Mr. Emmanuel Bekee, representing the technical regulator of the industry, and Mr. J.T. Dawha, representing Nigerian National Petroleum Corporation.

Others are Mr. A.O Ajibola, representing Council of Registered Engineers of Nigeria, Mr. Mike Onyekonwu, representing Nigerian Content Consultative Forum, Mr. Sani Shuaibu, representing the Ministry of Petroleum Resources, Mr. Fola Daniel, representing National Insurance Commission, and Mr. Ernest Nwapa, the executive secretary of NCDMB and secretary of the governing council.

As Nigerian banks continue to launch mobile, online, and e-payment products, finance experts say banks should adopt global solutions to combating electronic related crime.

Those who spoke on the issue said banks have to pay close attention to customer service processes and consider ways to improve them. Commending the efforts of the Central Bank in regulating fraud relating to mobile technology, Ifeoma Monye, a finance analyst at Ciuci Consulting, a management consulting firm, said Nigerian banks need to move quickly with the new trends in technology that eliminate or reduce fraud to the barest minimum.

“Over the years, banking has evolved from the traditional model of customers’ queuing for services in banks to modern day banking, where banking services can be reached through the Internet. Information technology is one of the major issues banks have to deal with as it is more evident that only the banks that have and use their technical resources effectively will be able to have a real competitive advantage in this fast-changing industry.”

She said the issue of financial fraud has also slowed the deployment of such technology, adding that mobile banking has a great potential in Nigeria if regulation is got right and fraud reduced to the barest minimum.

“In order to gain from the benefits that mobile banking offers, the Nigerian financial sector must begin to take necessary steps to align with the related global trends,” she said.

Relief in sight

However, relief may come the way of bank automated teller machine (ATM) card fraud victims as the Central Bank has begun moves to make banks liable for fraud committed on their platform. The Central Bank, in a statement issued last week, stated that banks need to be more responsive to complaints of card fraud by customers.

“It has become necessary to put measures n place, in addition to the existing guidelines to stem this tide” the circular titled ‘Circular on the need to combat card fraud’ and dated August 30, stated.

But Mr. Paul Love, a solutions consultant at ACI worldwide, a provider of application software for electronic payments, said liability of ATM card related fraud was relatively clear. According to him, the card holder and the bank are liable for the loss, depending on the point at which it occurred.

Who is liable?

“From a liability point of view, in normal circumstances, the cardholder is absolutely liable for the transaction. If a card is used after a customer has reported it stolen – the bank should then be liable. But what if the PIN was compromised and the card stolen, and then used before the customer is able to report it to the bank – strictly the customer is liable, but will the bank enforce this in all cases?” he said.

However, the Central Bank in the circular stated in clear terms that banks shall bear the liability for any fraud perpetrated with the use of cards issued without written requests from account holders and directed that no debit card can be issued on an account without a written request from the account holder.

Some banks stated that they are yet to be notified of the circular issued by the Central Bank. A source at Zenith Bank said the embargo on the use of temporary staff in the card management department of banks may mean getting more staff in the industry if the conditions were to be met.

“Yes, this could mean getting more staff to handle card management. We usually send SMS alerts to customers for those who subscribed before, whenever there is an increase or decrease in their account balances, as the case may be, so this is not entirely new. Customers with issues regarding ATM frauds and issues related to their cards are usually directed to state their case at the branch where their accounts are domiciled to be attended to,” he said.

A source at Spring Bank, however, said the category of staff that handle card sections are usually permanent staff due to the nature of that line of service. “The people that handle such issues are trained and experienced professionals, Information Technology experts, because of the sensitivity of that issue.”

The Central Bank stated that appropriate sanctions will be imposed for non-compliance, though it did not state a time limit for the compliance.