Archive for nigeriang

Jonathan appoints military ADC

Jonathan appoints military ADC

Goodluck Jonathan yesterday appointed Ojogbane Adegbe, a Lt. Colonel, as his Aide de Camp.

Born on May 12,
1972, Mr. Adegbe graduated from the Nigerian Defence Academy, (NDA),
Kaduna, in September 1995, as a member of the 42 Regular Course. He
holds a Bachelor of Science degree in Mathematics and a Masters in
Intelligence and International Security from Kings College, London.

Prior to his
appointment, Mr. Adegbe served at 1 Division Intelligence Group,
Kaduna; 26 Motorized Battalion ECOMOG, Sierra Leone; Nigerian Army
Depot, Zaria; Nigerian Army Intelligence Corps (HQ NAIC); Office of
Defence Adviser, London, United Kingdom; Intelligence Production
Centre, HQ NAIC, as well as 81 Division Intelligence Group, Lagos.

He hails from Ofu Local Government Area of Kogi State, and is married with three children.

Meanwhile, the
Delta State government yesterday attributed the relative calmness and
increased business activities in the Niger Delta region to the peace
initiatives of the late president, Umaru Yar’Adua. Speaking after a
courtesy call by a delegation of Delta State elders on Mr. Jonathan at
his Aguda House residence, the Delta State governor, Emmanuel Uduaghan,
said the contribution of late Yar’Adua to the Niger Delta can be
confirmed by increased oil production and freedom of movement.

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Reps launch investigation into Yar’Adua Road contract

Reps launch investigation into Yar’Adua Road contract

The
House of Representatives has ordered investigations into the massive
Abuja airport road project which the lawmakers say bear questionable
features in funding and terms, similar to the Abuja airport runway
currently under a similar probe.

Investigators are
to find out how the former Federal Capital Territory administration,
under Adamu Aliero, arrived at the whopping N257 billion for the
expansion of the twin outer expressways that lead to the city airport.

Also, they are to
determine why the administration discarded earlier agreed that the
project be funded through a Public Private Partnership (PPP) with the
private sector paying 60 per cent, while the government paid the
remaining.

Shortly after
flagging off the construction, Mr. Aliero secured the approval of the
late president, Umaru Yar’Adua, and opted for a total government
funding of construction work, the motion sponsor, Dino Melaye said.

The job was awarded
to Julius Berger Plc, which has recently come under attacks for
undertaking to construct a 4.4km Abuja airport second runway an
“outrageous” cost of N64 billion.

In the road
contract , a member, Gbenga Onigbogi, who said he accessed the terms,
alleged the company quoted a tonne of iron rod for N500, 000 each
against market price of N100,000.

“We need to find
out why jobs involving the Julius Berger don’t always go through
competitive bidding and the costs are often times varied,” said Rivers
state member, Betty Appiafi.

The House Aviation
committee has held hearings on the runway contract where shocking
details were revealed. Its reports have yet to be formally submitted
and approved by the house.

At that amount, the
contract was granted without a bill of quantity, in-house costing by
the aviation authorities. Also amazing negligence on the role of the
Bureau for Public Procurement was uncovered.

For the Airport
road construction, recently named after Mr. Yar’Adua, the
representatives are opting for an independent Adhoc committee to
conduct the inquiry.

The investigations
have been long in coming, after lawmakers raised concerns last year,
about the abandonment of the PPP option with the former FCT Minister,
Mr. Aliero, when the construction began.

Skeptical lawmakers

Mr. Aliero
explained then that the decision was taken after the federal government
discovered that the option will “mortgage Nigeria”.

“The private group
that was supposed to partner with government was to get money from the
commercial banks and the agreement would have made the government to
pay the interest rate which was too high,” recalled Leo Dilkon, the
Deputy Chairman of the House Finance committee, which met with Mr.
Aliero.

The interest rate amounted to N140 billion, Mr. Dilkon said.

But the lawmakers
are doubtful of the explanation, questioning whether such details were
overlooked before the signing of the contract.

“I see a similarity
between what happened on the airport runway project and what is
happening here,” said Igo Aguma, who represents Port Harcourt
constituency. “We need to find out how water entered the boat.” The
inquiry is to decide the true term of the deal, re-evaluate the
project, re-measure the road distance, compare charges for similar
construction in other parts of the northern zone, and recommend
prosecution for those found guilty of misdeeds.

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Former Ghanaian leader lauds Jonathan

Former Ghanaian leader lauds Jonathan

John
Kuffour, the former president of Ghana, on Thursday asked Nigerians to
support our country’s new helmsman in achieving his visions, as he
assured that Goodluck Jonathan is capable of moving the nation forward.

Mr Kuffour, who
spoke to aviation correspondents at the presidential wing of the
Murtala Mohammed Airport (MMA), Lagos, on arrival from Abuja,
maintained that though Nigeria is facing challenges, the president
should be given the chance to settle in order to efficiently discharge
his duties.

“I’m sure now there
is a bit of crisis in the country, but the president is very new. Let
him settle into his job; I’m sure he will give the leadership the
nation wants,” he said.

Asked to comment on
whether Mr Jonathan should run for the 2011 presidential elections in
Nigeria based on the zoning formula adopted by the ruling Peoples
Democratic Party (PDP), the ex-Ghanaian leader declined, saying that
the issue is domestic and should be handled by Nigerians. He added that
our government should abide stipulated rules.

“I would say this
is very much an internal matter for Nigeria, our biggest country in the
continent,” he said. “We should trust the governments to work by their
constitutions and respect the constitutions.”

Meeting with Obasanjo

Prior to Mr
Kuffour’s arrival at the airport, Nigeria’s former leader, Olusegun
Obasanjo, arrived the VIP wing and on disembarking from his vehicle,
went straight to the lounge to await Mr Kuffor.

The former Ghanaian
leader, who went on to the lounge to meet with Obasanjo, where they had
a 35-minute conversation, later disclosed that they discussed issues
affecting the continent.

“We discussed how Africa will move forward steadily to the benefit of all of us the citizens,” he said.

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Man dies in fight with lover’s husband

Man dies in fight with lover’s husband

The police have
arrested an outraged man for killing one Musibau Olopade, a middle-age
artisan, who was caught with his wife inside their bedroom in Abudu
village, Ilogbo-Ota, Ogun State.

The state
Commissioner of Police, Musa Daura, who told the press at Eleweran
Police Headquarters, Abeokuta, said Abdullahi Adekunle faces charges of
murder and would be prosecuted by the police authority for the death of
Mr Olopade.

Mr Daura said on
the fateful day, Mr Adekunle had gone to work, but returned home early
to meet the deceased having sex with his wife on their matrimonial bed.
A fight ensured between the two, and in the process, Mr Olopade was
stabbed.

‘The suspect
returned from work and met one Musibau of the same village on his bed
having sexual intercourse with his wife, the suspect stabbed Musibau
Olopade with a knife at the back and he died before getting to the
hospital,’ the police boss said.

The suspect, Mr
Adekunle who was paraded alongside his allegedly unfaithful wife,
confirmed that he stabbed the deceased to death.

Return with money for food

Mr Adekunle, a
bricklayer, said he had gone to work, but came back home to give money
to his wife for food items only to met the door to their room locked.

“When I returned
home and noticed that the door to our room was locked from behind, I
knocked severally, but there was no response. So I had to force the
door open, and to my surprise I met the man having sex with my wife,”
he said.

“It was at this
stage that a fight ensured between me and the man, so I took a knife
and stabbed him at the back when he was trying to bolt away. I never
knew he would die of the attack.” The wife at the centre of the
tragedy, Funmilayo Adekunle, said the deceased forced her into having
sexual intercourse with him.

“He just entered our room when my husband was not around and forced me unto the bed before having sex with me,” she said.

The housewife, who claimed to be a canteen attendant, said nemesis
caught with her and the deceased when her husband suddenly returned
home.

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Natural disasters blight Cross River rural communities

Natural disasters blight Cross River rural communities

Nestled on the bank
of the Biase Local Government Area of Cross River State is the Agwagune
community. Due to its geography, the people of Agwagune mostly engage
in two occupations: farming and fishing. And there is a large market
within the community for sale of produce.

But over the last
decade, the coastal surroundings of Agwagune has become its albatross.
Perennial flooding and erosion have decimated the landscape, sweeping
away houses and farms and unsettling the people. All these have meant
the loss of fame, and sales for Agwagune, for the community was reputed
as a rural trading hub and picturesque scenery for tourism.

This picture is not
peculiar to Agwagune. In most rural parts of Cross River State, nature
appears to have gone beserk. Rainstorm disasters, raging floods, and
mudslides have become the lot of the people these recent times.
Residential houses, schools, churches, hospitals, economic trees,
communication masts, and public offices have been at the receiving end
of this rage. The consequence is a dislocation of social and economic
life.

Natural disasters
in Cross River in the last three years can be likened to a “biblical
deluge”. Every wet season is accompanied by savage rainfall, resulting
in some deaths and million naira worth of damages.

Even in Calabar,
the state capital, and other urban centres, sewers are clogged while
streams in rural communities overflow their banks – blocking streets
and foot paths.

Appeals for aid
flood government relief agencies, but the magnitude of the disaster
often overwhelms government’s response. Since each destruction leaves
in its wake mud slides, de-capped houses, loss of income, poverty and
emotional stress, it is always a struggle to rehabilitate the victims
and assuage their feelings.

In all these,
Agwagune is a case study. On the heels of the environmental degradation
of this community comes problems of inaccessibility. Vehicles now find
it difficult driving in. Thus, the economy of Agwagune, like other
villages around it, appears victimised by nature.

The havoc wrecked
on houses by flood and erosion has prompted the state government to
build some housing units for the displaced. But these apartments are
like a drop in the ocean. The federal government, which promised 200
units of 400 flats in Agwagune to solve the problem of accommodation,
is yet to fulfill the promise after five years of waiting. Now, there
is pressure on Abuja to keep to its word.

Every market day,
traders from the urban centres and other rural areas struggle to visit
Agwagune to buy or sell. While traders from the cities go there with
cloths, electronics, metals and shoes to sell, the natives provide
agricultural produce for purchase, including okro, yam, cassava, garri,
vegetables, fish, as well as farming implements like hoes, diggers,
fishing nets, cutlasses, spears, and shovels.

The farm produce
are, of course, sold cheaply due to the now difficult terrain of
Agwagune. Often these produce, because of their perishable nature, rot
away once buyers from the city cannot access the community.

Uprooted in the community

Last October, an
unprecedented flood swept away crops and farmlands, as well as homes in
the community. Farmers warn that the harvest is likely to be meagre
this year as a lot of the crops were washed away.

An assessment by
the joint team of the National Emergency Management Agency [NEMA] and
the Cross River State Emergency Management Agency [SEMA], showed that
the situation was beyond the individuals and the community to handle.
The agencies donated foodstuff and building materials to the community.

The traditional
ruler of Agwagune community, Onun Fidelis Effime, who received the
materials, appealed to the federal government to, without further
delay, commence construction work on the promised 200 units of 400
flats for the landslide victims.

One of the
displaced persons from the community, who now lives with relatives,
Joseph Ogbodim, said he has been squatting with his kinsman for the
past two years.

“The six room
apartment is grossly inadequate for his family and mine, given the
African extended family system. My humble appeal is to government and
those concerned to make concerted efforts towards rehabilitating us”,
he said.

One of the children
of the victim, Michael Ogbodim,15, who likes to play football with his
peers in the compound, said though his uncle has been generous in
accommodating them for this long, it would have been better for them to
live in their own house.

“At the age of 15,
custom demands that I should begin to plant economic trees such as
pear, coconut, orange, flowers, and mangoes around our compound which I
can grow up to appreciate, but this cannot be done in another person’s
compound,” he said.

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A new driving experience

A new driving experience

Driving can get better with the sleek, portable, and subtle 2010
Honda Civic. The Civic, which is long known as Honda’s smallest car, now comes
with slightly bigger build. The car has a wider and longer front and rear lights.
It seats lower on the ground, while the front grille and Honda logo is
beautifully designed with shiny chrome.

Design

The 2010 Honda Civic’s structure has been built to offer maximum
comfort both exterior and interior.

The interior has a unique design, with its digital speedometer
and gas gauge located underneath the windshield. The analog tachometer is
located at its standard position, behind the steering wheel.

The car comes in two basic body types; the sedan and coupe. Both
types are available in five line-up models which are the DX, LX, EX, EX-L and
Si. All versions are lined up in different grades, which are distinguished by
slight differences with both exterior and interior.

The DX type steps on 15-inch steel wheels and are fitted with
power windows, but doesn’t come with a stereo except for the DX sedan optional
with a four speaker CD/MP3 audio system.

The LX type steps on 16-inch wheels and features keyless entry,
cruise control and sliding armrest.

The EX type is endowed with a sub woofer six-speaker sound
system and steering-wheel-mounted audio control.

The EX-L type comes with leather upholstery seats and heated
front seats, while the Si type steps on 17-inch alloy wheels, a higher power
and sports tuned performance.

The 2010 Honda Civic sedan also comes with three special
versions, which are the LX-S sedan type with rear spoilers and alloy wheels;
The GX type with similar features to the LX; and then Hybrid model with
automatic climate control and similar features to the EX.

Engine Power

The Civic is powered by varying engine types and transmissions.
The DX, LX and EX models are powered with a 1.8 litre four-cylinder engine that
produces 140 horsepower and 128 pound-feet of torque.

The car comes mated with a standard five-speed manual transmission
and an optional five-speed automatic transmission.

The Hybrid type uses a gasoline/electric hybrid power train to
maximise fuel economy. The Civic Si type is powered by a 2.0 litre engine and
integrated with a six-speed manual transmission.

Safety

The 2010 Honda Civic comes with side curtain and front seat air
bags. It is also built with antilock brakes and active front head restraints.

Some models come with specifics like four-wheel disc brakes
present only in the EX and Si and stability control in the EX-L, Si and Hybrid
type.

Price

The 2010 Honda Civic ranges in price from $16,000 to $ 22,000
depending on the model of the car.

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Insurers protest alleged anomalies in scheme

Insurers protest alleged anomalies in scheme

Insurance
firms that enlisted to participate in a group life assurance scheme
initiated in 2008 for all federal government civil servants have raised
alarm over series of anomalies uncovered under the programme.

The policy was supposed to start in 2004 under the Pensions Act, but did not due to the lack of experienced personnel.

In
a petition to the Acting President, Goodluck Jonathan, and the
leadership of the National Assembly, a copy of which was obtained by
NEXT, on Monday in Abuja, the aggrieved workers alleged, among others;
that the managers of the scheme compelled them to swear to an oath of
secrecy not to reveal the anomalies before enlistment into the scheme
for the year 2010.

The
insurers, comprising 26 underwriters and 109 brokers, are demanding
from government; the outstanding N2 billion premium for 2009 business
year, which they claimed had been diverted by Steve Oronsaye, the Head
of Service, into the settlement of the current year’s premium.

The
letter, signed by John Fidelis and Mike Olumoran, under the aegis of
2008/2009 Head of Service Group Life Assurance Consortium also alleged
that Mr. Oronsaye, who claimed that the government was misled on the
2008/2009 business by the lead broker, Leverage Insurance Broker, again
appointed the same broker as part of the advisors on the current 2010
scheme.

Oath of secrecy

The
insurers, who also forwarded copies of the signed agreement and the
list of insurers with the protest letter to buttress their claim, said
they were afraid to talk publicly about the decision because of the
oath they were compelled to take.

“Having
diligently carried out the assignment in line with the agreement, we
have been expecting the payment of our premium and commissions for
services rendered, but, contrary to the advice given to the Head of
Service for the payment of premium, Mr. Oronsaye withheld the N2
billion until last March 16, only to direct the AGF (Accountant General
of the Federation) to pay the premium to the newly appointed
underwriters and brokers for 2010 programme for the job they have not
done,” stated the petition.

The
insurers said they were unaware of how the balance of the money for the
2008 premium was spent when the complete records of all civil servants
that died during the year are yet to be given to them.

“About
N5 billion was approved as premium for 2008 for the group life scheme,
while another N1 billion was set aside for settlement for deaths during
the transition period of the group life between June 2004 and July
2007. Till date no account has been rendered to the consortium by the
lead broker, Leverage Insurance Broker and the lead underwriter,
Capital Express. Besides, our remuneration as underwriters and brokers
was based on N4 billion, instead of N5 billion,” they said in the
protest letter.

The
insurers also claimed there was no transparency in the process that
attended the appointment of five advisors for the 2010 scheme, who were
given the lion’s share of the business, leaving others to scramble for
a share of the balance of N1.2 billion of the premium.

Inflated premium

During
his meeting with the Nigerian Council of Registered Insurance Brokers
early this year, Mr. Oronsaye had alleged that the industry inflated
the premium for the scheme as a way of saving money for government,
claiming payment was made only for 2008 out of the two year contract
for 2008/2009 due to the high rate.

“They
(workers) took a cover for two years -2008/2009, and the premium was
paid for 2008, though we took out N1 billion to pay claims for people
that had died between 2004 and 2007 when the scheme ought to have
commenced,” he said. “Last year, they put pressure on me to pay the
2009 premium, and I said, ‘Pay what premium?’

You have given a rate of 6.5 per mille for poor civil servants, and
I asked them how they arrived at 6.5 per mille premiums, because I
wanted to know the rate of death and the rate of birth. Birth rate is
less than 3 percent and death rate is about 3.5 percent. So we are
paying triple if we are 6.5 per mille,” he added.

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How prepared are you for retirement? Start early

How prepared are you for retirement? Start early

When you are in your 20s and 30s, retirement may be the last thing on your mind. Many of us don’t like to face the fact that we are getting on and it is easy to put off taking concrete steps as retirement still seems so far away.

Ideally, you should start planning for retirement as soon as you start your first job. Those who start saving for retirement in their 20s have a better chance of building a large nest egg. Saving even a small amount on a regular basis can add up to a tidy sum over a long period of time and this will enable you to maintain the standard of living that you would have become accustomed to by the time you retire.

The Pension Reform Act 2004

Most people are not saving, or certainly not saving enough for retirement. Thanks to the Pensions Reform Act, 2004, we have all become aware of pensions, and retirement planning. Don’t just brush it aside and think it doesn’t apply to you. It may be one of the most important financial decisions you will make this year.

In a nut shell, the key objectives of the new scheme are to ensure that all employees in the Federal Public Service, the FCT and the private sector where the institution has 5 or more employees, receives his or her retirement benefits as and when due. It is largely voluntary for other categories of employees. It also assists improvident individuals by ensuring that they save to cater for their livelihood during old age.

A fully funded contributory system

Under the pension scheme, which is contributory and fully funded, employees and employers contributes a minimum of 15 per cent of the employees’ total emoluments (basic salary, housing and transport allowances). An employer may choose to bear the full contribution subject to a minimum of 15 per cent of the employees’ monthly emolument. Employees may opt to make additional voluntary contributions to augment their retirement savings. Both contribution and retirement benefits are tax-exempt.

The contributions are deducted at source from the salary of the individual and transferred to the relevant Retirement Savings Account (“RSA”). When you are handed your first pay slip, the deductions may seem alarming, but do remember that a few years down the line, they may represent significant savings that many of us lack the discipline to accumulate on our own.

Carefully select a Pension Fund Administrator (“PFA”)

You are responsible for selecting your Pension Fund Administrator (“PFA”) and this decision is of immense importance as the accumulated balance in your RSA largely depends on how well your PFA invests your contributions; the PFA’s job is to administer the contributions and invest in a manner that should safely ensure reasonable returns.

Your PFA will select an asset allocation mix that may include mutual funds, stocks, bonds, money market, or other investment instruments. The National Pensions Commission (“PenCom”) ensures the prudent management of pension assets through supervision and regulation.

Choose a PFA with an experienced investment management team; a sound parent company with a strong performance track record gives additional comfort. Other important issues include a large network of branch offices, outstanding customer service and retirement planning advice, and its application of state-of-the-art information and communication technology.

Your Retirement Savings Account

As an employee you are expected to open a Retirement Savings Account with a PFA. Your RSA belongs to you throughout your life, and is protected with the use of usernames, passwords and PIN numbers. Your RSA is portable so can be moved from one job to another and should you be dissatisfied with the level of service or investment returns that your PFA provides, you may opt to switch houses.

How do you make withdrawals from your RSA?

You can make a lump sum withdrawal from your RSA at age 50 or upon retirement whichever is later, provided that what is left is enough to procure an annuity from a life insurance company or fund a programmed withdrawal that will generate at least 50 per cent of your last monthly salary at retirement. Voluntary Contributions can be withdrawn as a lump sum at any time.

Three months ago, Titi was affected by a restructuring exercise carried out by her company. She is not yet 50 years old and so is not entitled to a lump sum payment. She needs some money to tide her over so contacts her PFA.

Tito will be able to access her RSA if she is not able to gain employment within six months from the day she left the company. She will be entitled to 25 per cent of her RSA as a lump sum while the balance will be paid to her as a programmed withdrawal over her life time when she attains the age of 50 years.

The rationale is that retirement benefits are to cater for your life in old age when you can no longer work, so paying out all of it before you are 50 years old may affect you in your old age.

Will your pension be enough?

Do bear in mind that pensions, whilst they are an important part of your retirement income, are not intended to meet all your retirement needs. Even though both your pension contribution and retirement benefits are tax-exempt, you should spread your retirement savings across deposits, bonds, stocks and property. It is important that investment choices at least keep pace with inflation.

After several years of hard work, raising a family, and hopefully, building your nest egg, your retirement years should be one of the most rewarding of life’s stages. The responsibility for building your nest egg and ensuring that it supports you for the rest of your life lies with you. Make saving for retirement a priority and start now, whatever your age.

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Stock market rally continues

Stock market rally continues

The stock market ended the past week in the green zone with
gains that are mostly attributed to buying pressure of investors. The activity
during the three days of trading in the week was a continuation of the market’s
adopted pattern since the beginning of the year, as trades were dominated by
speculations that were followed by quick profit reaping transactions.

Last week was particularly eventful following the death of
President Musa Yar’Adua, as Goodluck Jonathan became the nation’s substantive
president. Also, the Asset Management Company (AMC) Bill was passed by the
Senate on Wednesday. The bill is expected to unburden banks from toxic waste
and free their balance sheet through purchase of the bad loans, thereby
enabling banks to play their financial intermediation role effectively. With
this new development, we expect further stability in the capital market.

Market review

Activities in the stock market have been upbeat since the
beginning of the year as investors renewed optimism in the equity market due
largely to hopes that recent measures by Central Bank of Nigeria (CBN) and
other market regulatory bodies would sustain market recovery.

Positive earnings results of companies as released last week
reaffirmed hope for a sustained rebound, even as more investors had reasons to
turn positive and put money into the market.

In the past week, the NSE All-share index rose by 103 basis
points to close the week at 27,503.36 points.

Since the beginning of 2010, the market capitalisation has
gained more than 30 per cent. It closed on Friday at N6.65 trillion. Stocks
edged higher on Friday as investors looked to extend a strong run that has left
major indices up 0.38 per cent for the week. The current bullish trend should
continue in the months ahead. However, investors should exercise caution as the
market may witness minor correction phase.

During the week, both the market capitalisation and the NSE AS
Index gained 0.38 per cent respectively. So far, the market has recorded a
YTD-high market capitalisation of N6.78 trillion, representing a YTD yield of
33.33 per cent. Overall, the market traded a total of 1.75 billion units of
shares, valued at N17.11 billion in 25,710 deals.

The Banking sub-sector remains the most active (measured in
terms of traded volume) as it recorded 836.56 million shares valued at N9.42
billion exchanged in 11,033 deals while the Insurance sub-sector was second
with traded volume of 389.61 million shares valued at N349.39 million in 1,802
deals.

Corporate actions and
results

In the past week, ECOBANK Nigeria Plc released its full year
trading result to the floor of the Nigerian Stock Exchange. The company
declared a Gross Earnings of N59.864 billion representing an increase of 8.54
per cent from previous year’s trading result. The company also posted a Loss
After Tax of N4.588 billion.

Furthermore, ECOBANK also released its interim report for the
period ended 31st March, 2010 (First Quarter). A Gross Earnings of N13.703
billion was recorded, while a Profit After Tax of N1.071 billion was declared.

JULIUS BERGER Plc also released its interim report for the
period ended 31st March, 2010 (First Quarter) to the floor of the Nigerian
Stock Exchange. Julius Berger, which has 1.2 billion units of shares
outstanding, declared a Turnover of N31.414 billion and a Profit After Tax of
N780.959 million.

Similarly, JAPAUL Oil & Maritime Services Plc released its
interim report for the period ended 31st March, 2010 (First Quarter) to the
floor of the Nigerian Stock Exchange. The company, declared a Turnover of
N1.615 billion and a Profit After Tax of N425.515 million. The table below
shows full details of companies’ results and performances released during the
week.

Market outlook

Earnings projections of companies suggest that earnings should
continue to improve over the next couple of quarters. Earnings that exceed
expectations have been shown to be conducive to higher equity prices.

Given extremely low levels of interest rates, stock market activities will
surge higher, thereby creating more bullish sentiment.

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China to press Kim Jong II on economy, nuclear talks

China to press Kim Jong II on economy, nuclear talks

North Korean
leader, Kim Jong II, headed to Beijing by train on Tuesday to talk to
Chinese leaders about economic reforms and a return to nuclear
disarmament negotiations, but any bold move is unlikely.

Reclusive Kim’s
last visit to China in 2006 brought effusive promises of economic
cooperation between the two neighbours, as well as broad vows from the
North Korean leader to seek progress towards “denuclearisation.” There
have been few signs of either.

Neither Beijing nor
Pyongyang has confirmed Kim’s latest trip abroad, but there was little
doubt the short, frizzy-haired leader entered China on Monday, staying
in Dalian, a northeastern port promoted as a showcase of market reforms.

A train that
resembled plane-shy Kim’s chosen transportation then left a city
station early on Tuesday evening and a source with ties to China’s
leadership said he was going to Beijing for talks with President Hu
Jintao and other officials.

North Korea is keen
to learn from China’s success but any changes would be “gradual,” said
the source, who declined to be named because the visit is politically
sensitive.

China will also urge a return to six-party talks on nuclear disarmament that Pyongyang has boycotted for over a year.

Economic concerns

But Zhang Liangui, an expert on North Korea at the Central Party School in Beijing, said that the economy is the key.

“I think the North
Korean leader will be most concerned about economic relations, because
the domestic economy there is in trouble,” Zhang said.

Chinese Foreign
Ministry spokeswoman Jiang Yu refused to confirm or comment on the
trip, saying only that “China and North Korea have a tradition of
high-level mutual visits.”

The choice of
Dalian, with its foreign companies and industrial parks, showed that
Beijing wants to nudge Kim to grapple with his feeble economy, said
Zhang.

A South Korean
official, speaking on condition of anonymity, said that Kim, who left
his a Dalian hotel in a motorcade of limousines, mini-buses and
security escorts, visited a dock facility near Dalian.

A mismanaged
currency re-denomination last year paralysed much of North Korea’s
nascent private business and sent shivers of unrest through the brittle
economy.

“China hopes that
Kim will learn from it, but North Korea doesn’t think that way,” said
Zhang, citing Pyongyang’s adherence to a doctrine of “juche” or
self-reliance.

“It would be childish to expect that Kim Jong II will change his mind because he has visited a few projects.”

China is a crucial
economic and political backer of its smaller neighbour, which it fears
could become a dire burden if 68-year-old Kim’s regime falls apart and
spills refugees into northeast China.

In 2009, trade between China and North Korea, which has an estimated
GDP of $17 billion (11.2 billion pounds), was worth $2.7 billion.

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