Nigeria Content Online

The value of equities at the Nigerian Stock Exchange (NSE)
depreciated further on Wednesday after closing negatively on Tuesday.

The NSE market capitalisation closed yesterday at N7.913
trillion from Tuesday’s figures of N7.920 trillion, reflecting N7 billion
losses or 0.08 per cent decrease. The market had lost N92 billion or 1.14 per cent
on Tuesday.

The All-Share Index also lost 0.08 per cent or 21.32 units on
Wednesday, down from 24,804.22 basis points to close at 24,782.90. The NSE
sectoral indexes recorded negative performance on Wednesday as the NSE-30
Index, which measures activities of blue chips in the market, dropped by 0.21
per cent.

The NSE Banking shed the highest points by 0.26 per cent; the
Food/Beverages plunged by 0.12 per cent, followed by the NSE Oil & Gas
which declined by 0.18 per cent, while the Insurance, the only gainer, went up
by 0.30 per cent.

Equity Analysts at Resource Cap, an investment advisory firm,
attributed “profit taking activities by investors” to the downturn, adding that
“sell pressures may continue across the sectors on the bourse.”

Low volume

At the close of Wednesday’s trading, a total of 253.22 million
shares valued at N1.930 billion were traded in 6,200 deals as against the
277.00 million shares worth N2.658 billion exchanged in 5,711 deals on Tuesday.
The banking subsector maintained its lead on the most active subsector chart
yesterday with 140.05 million units valued at N1.14 billion.

The volume recorded in the sector was driven by transaction in
the shares of Zenith Bank, United Bank and Access Bank. The Insurance subsector
followed, trading 26.047 million shares valued at N21.843 million. Transactions
in the subsector were largely driven by the shares of Aiico Insurance, NEM
Insurance and Lasaco Assurance.

The Mortgage companies subsector came third with investors
trading 26.032 million shares valued at N14.669 million. Investors in Resort
Savings & Loans, Union Homes Savings & Loans and Aso Savings &
Loans enhanced activities in the subsectors in terms of volume.

More gainers

The prices of 29 equities appreciated in value on Wednesday
while 20 depreciated. Okomu Oil led the price gainers, appreciating by 70 kobo
to close at N14.95 per share. Oando gained 70 kobo to close at N64.00 per share
while University Press grew by 29 kobo to close at N6.28 per share. African
Petroleum topped the price losers’ chart, depreciating by N1.31 to close at
N24.94 per share.

Ashaka Cement shed 91 kobo to close at N22.66 per share while
Ecobank Transnational Corporation lost 74 kobo to close at N15.26 per share.
Meanwhile, a total of 12 companies released their financial results at the NSE
floor on Wednesday.

Fidelity Bank, in its third quarter report, recorded a profit
after tax growth of 85.97 per cent. Nigerian Bottling Company third quarter
result shows a turnover growth of 14.06 per cent and profit after tax growth of
30.21 per cent.

Since oil companies gained dominance of the world economic
system, literally driving the engines of industrialisation and modern fossil
civilisation, they have taken several steps that have endangered humanity. The
massive burning of fossil fuels, such as oil and gas, have contributed
immensely to the stoking of the atmosphere with greenhouse gases responsible
for global warming.

The sector is also known to have been responsible for environmental
and human rights abuses in the world. The presentation of their commodity as
the cheapest form of available energy has been sustained over a century by cost
externalization to the voiceless, whose environments have been heavily
assaulted. The energy wars that are sometimes masked as war on terror are also
well known. The contribution of oil companies to human misery is well
documented.

Although the leopard may not change its spots, the companies
have not been blind to the woes they generate. One of the steps they have taken
to cushion the impact of their harm has unfortunately been nothing more than
hogwash. One subtle way this has been done has been to plant into public minds
that they are not oil, but energy companies. The difference may be subtle, but
it seeks to erode the stink that the former name carries. We insist on calling
them by the name that best describes them and to avoid grouping them in the
same slot as clean energy producing companies.

Apart from change of nomenclature, the fossil fuel sector has
etched some oxymoron into public minds, making people accept clearly
contradictory terms as being logical. Take the example of clean coal. What is
that? There are others, but this is not our focus in this discussion today.

Voluntary Principles on
Security and Human Rights (VPs)

Some oil companies, including Shell and Chevron, have signed up
to what is known as Voluntary Principles, by which they solemnly declare how
they would change their corporate practices in the area of security and human
rights. See the principles at http://www.voluntaryprinciples.org/.

The question this raises is whether the endorsement of these
voluntary and non-binding principles has brought about any positive change. The
VPs are not even known to be in existence by many. We will touch briefly on
some key areas of the principles. You are urged to ask how those principles are
applied in Nigeria oil fields.

The companies say they will report payments made to security
forces or, in our case, to the Nigerian government for supply of security cover
for company operations. If such records were properly kept, it would be
possible for such companies to be held accountable where funds are tied to
incidents that resulted in human rights abuses. If a company pays money to the
military, for example, and the funds support an assault on a community, the
link should be transparently traceable for this clause to make sense.

A look at the Voluntary Principles appears to start from the
premise that oil company security depends on the actions of the country’s
security forces. This thinking has maintained the relationship with the
Nigerian military and police and continues to encourage abuse. It also often
precipitates clear acts of mayhem. Oil companies sometimes review their
security arrangements to determine if the relationship they have built with the
security forces has been a credit or a liability.

A review conducted by Chevron in 1999 found that Nigerian
security forces were actually more of a liability than a benefit, and that they
were prone to cause great harm both to Delta residents and company employees.
Shell, on its part admitted in a 2003 security review, that it had contributed
to the rise of conflict and corruption in the Delta region through its
relationship with security forces. The question is, what changes have they
made?

We submit here that if the official security forces provide a
safe atmosphere for ordinary citizens, corporate citizens would also enjoy the
same. Moreover, if oil companies maintain their equipment, operate with the
same standards they apply in their home countries, and respect community
rights, there would be no need for special security arrangements that must be
eating into their resources.

The voluntary principles also require that oil companies
communicate effectively on Human Rights Principles to security forces and
ensure proper training, and screening of known human rights abusers.

Security officers of corporations and public security forces are
often tied together in mutually dependent arrangements, whereby governments
take primary responsibility for security and the private entity provides
resources and logistical support. To what extent have the guidelines provided
in the Principles been used to ensure that the conduct of the forces abides by
human rights law?

Holding Individuals
Accountable

It is known that oil companies do keep security logs showing
records of security incidents as they occur at their facilities. They should
also be required to keep full records of incidents in which local residents are
injured or killed in confrontations with government security forces, acting to
secure the interest of the companies. Such incidents should also be reported
promptly and publicly. Individuals indicted should be held accountable.

The Voluntary Principles provide an opportunity for the Nigerian
legislative houses at the state and federal levels to take their provisions,
review, and enact them into law. The oil companies may have endorsed the
principles as a way of beefing up their public image and presenting the face of
companies that care about human rights.

Enacting same into law will encourage the companies to implement
them by making them mandatory principles. It will also help the companies to
bridge a part of the huge deficits they have accumulated in terms of
transparency in their activities.

Nigeria still aims to pass a bill this year that will overhaul its energy industry, but the timing of its next oil licensing round is uncertain, a senior government official said on Thursday.

The Petroleum Industry Bill will re-write Nigeria’s decades-old relationship with its foreign oil partners, altering everything from the fiscal framework for offshore oil projects to the involvement of indigenous firms in the sector.

“The Petroleum Industry Bill, I assure you, will be passed, signed into law, before the end of this year,” Lee Maeba, chairman of Nigeria’s Senate Committee on Petroleum, told an Africa oil conference in Cape Town.

The government has repeatedly said passage of the bill is imminent, but revisions and debate have stalled the process. Oil executives have said billions of dollars of potential investment are on hold due to the uncertainty.

“The bill is on the table, the next thing is to consider it clause by clause, and then it’s passed. We don’t see any major problems,” he said.

Maeba said, however, that a decision on the timing of future oil licensing rounds was uncertain, pending the outcome of an audit of previous auctions.

Nigerian Oil Minister Deziani Allison-Madueke said last month a planned licensing round of marginal oil blocks would take place this year.[ID:nLDE69D0TZ]

“We are in the process of reviewing what we have achieved in previous bid rounds to decide whether we will hold another one or not. It depends on the review,” Maeba said.

He said the government had no specific date for when it expected to complete the audit.

Some 120 blocks were given out in previous rounds between 2005-2007 and Maeba said the major targets of the bid rounds — to raise revenue, increase daily production and increase local participation — had not materialised.

He also said companies who had not complied with their contractual obligations would have their licenses revoked and would be banned from participating in future auctions.

“The government is no longer taking this as a joke,” he said.

Reuters

In the midst of dwindling earnings, banks are cutting down on
their cost of doing business in order to remain profitable. As a result,
despite recording significant drop in their earnings, many banks still managed
to post significant rise in profit as seen in recent results.

For most banks, while gross earnings dropped, profit before tax
rose due to what analysts at Afrinvest, a financial research firm, refers to in
Zenith Bank’s case as “improvement across the bank’s key efficiency and
operating ratios.” Despite a 13.6 per cent drop in gross earnings, the
institution posted a profit before tax of 196.3 per cent.

In its update for the
bank’s third quarter result released on October 27, Afrinvest noted that
“continuous improvement across the bank’s key efficiency and operating ratios
has fuelled this performance even as top-line growth continues to come under
intense pressure.” A similar scenario played out in First City Monument Bank
(FCMB) as gross earnings dropped by 19.02 per cent from N55.02 billion to
N44.55 billion. Interest expense however when down from N21.8 billion to N16.7
billion while profit before tax rose by nearly 2000 per cent from N298.13
million to over N6.1 billion.

For Sterling Bank, while gross earnings declined by 13 per cent
from N26.6 billion in September 2009 to N23.1 billion in the corresponding
period in 2010, profit after tax rose to N5.3 billion from a loss of N6.2
billion last year.

The bank attributes this significant increase in profit to
efficiency and cutting down on its cost of doing business. Thus, funding costs
declined 38 per cent to N8.1 billion from N13.0 billion. “Sterling Bank
emphasis on efficiency and profitability has been the cornerstone of its
performance in the third quarter. Discretionary costs have been kept in tight
check and new processes brought on stream at the beginning of the year continue
to show expected results”, said the bank’s executive director, Lanre Adesanya.

Common experience across
board

Access Bank’s third quarter results showed that gross earnings
declined by 15.2 per cent from N91.93 billion to N77.95 billion. From a loss
position of N10.64 billion in the third quarter of last year to a profit before
tax of N14.06 billion this year.

Aigboje Aig-Imoukhuede, Access bank group managing director,
said the bank has achieved significant growth in its deposit base with a 24 per
cent increase in customer deposits quarter on quarter as it continues to
benefit from the continuing success and effectiveness of its value chain
strategy. “With our focus on maintaining a high quality service-centered
business model supported by a robust enterprise risk management framework, the
bank is well positioned to deliver a strong full year performance in line with
the positive results achieved year to date,” Mr Aig-Imoukhuded said.

First Bank also posted a gross earnings of N177.1billion, an 11
per cent drop over the N197.9 billion posted last year.

However, profit before tax rose to N40.7 billion from a loss of N6.6 billion
posted last year. Guaranty Trust Bank similarly showed an 11.9 per cent drop in
third quarter earnings from N136.1 billion to N119.8 billion, while pretax
profit rose significantly by 82.1 per cent from N21.4 billion to N39 billion.

Barely two weeks
after the country received and outlook downgrade by Fitch Ratings,
Standard and Poor’s, another international rating agency has given the
country a pass mark with a ‘B+/B’ Ratings affirmed on resilient
economy. It also gave the country a stable outlook, despite what it
called ‘high political risk’.

In the report
published yesterday, S&P stated, “We consider that the ratings on
Nigeria are constrained by high political risk, but supported by a
strong balance sheet. We are affirming the ‘B+/B’ global scale ratings
and the ‘ngA+/ngA-1’ Nigeria national scale ratings.” The report says
Nigeria’s outlook is stable, “reflecting our expectation that Nigeria
will maintain its strong external and fiscal balance sheet, and that
budgetary performance will gradually improve over the next few years.”

Elections accentuate risk

The report added that political risk in Nigeria may be exacerbated by the forthcoming presidential elections.

“The affirmation
reflects our view that Nigeria’s economic performance and external
liquidity has been better than we previously expected, although its
fiscal performance has been weaker and political risk could heighten in
the run-up to the 2011 presidential elections,” said Standard &
Poor’s credit analyst Christian Esters.

It noted that
Nigeria remains a low-income country, with GDP per capita estimated at
$1.32 billion in 2010. Nevertheless, Nigeria has a strong fiscal debt
position, despite the sharp deterioration in budgetary performance
since 2009. “We estimate that Nigeria’s general government debt will
increase to above 16 per cent of GDP by year-end 2010, which is still a
comparatively low level.”

Comfortable external liquidity

The report said
Nigeria also benefits from comfortable external liquidity, with
continuous current account surpluses. “For 2010, we expect a surplus of
approximately 14 per cent of GDP, and gross external financing needs at
a low 54 per cent of current account receipts and usable reserves.”

The ratings firm
said the stable outlook reflects expectation that Nigeria will maintain
its strong external and fiscal balance sheet, and that budgetary
performance will gradually improve over the next few years. “We also
expect that tensions surrounding the forthcoming April 2011
presidential elections could increase political uncertainty and
destabilise the country for some time after the elections,” said Mr
Esters.

Finance minister,
Olusegun Aganga had rejected the Fitch ratings report on the ground
that it did not reflect the effort by government to address the
concerns raised. Fitch cited the depletion of the Excess Crude Account
(ECA), the decline in foreign exchange reserves and their own concern
that the reform agenda of the current administration which they found
to be very positive may not be implemented before the elections; the
following as the major reasons for the revision of the outlook.

Mr Aganga said, “We
do consider the decision to adjust the outlook downwards unduly
punitive and disagree with it given the numerous positive features of
the country’s economy and ongoing reforms.” He said government has
taken a number of measures which include the proposed establishment of
a Nigerian Sovereign Wealth Fund and urgent steps which are being taken
to address the infrastructure deficit particularly in the power sector
as outlined in the Power Roadmap that was unveiled by the President in
August.

The upbeat
witnessed at the Nigerian Stock Exchange (NSE) on Monday declined
yesterday as the performance of equities close on a negative note.

The market
capitalisation of 198 first-tier securities closed lower as market net
worth dropped by N92 billion at the close of Tuesday’s transaction;
from N8.01 trillion to N7.92 trillion, representing a decrease of 1.14
per cent. The NSE All-Share Index depreciated by 1.18 per cent on
Tuesday to close at 24,804.22 basis points from the previous day’s
figures of 25,102.20.

David Adonri, chief
executive officer of Lambert Trust and Securities Company Limited, a
stock broking firm, said equities’ value declined because short term
investors are reaping part of the attractive profit recorded in recent
rally sessions.

The Exchange
sectoral indexes reflected to sell activities yesterday as NSE-30,
which measures the performance of blue chips in the market, dropped by
0.02 per cent. The NSE Oil & Gas dropped the highest points by 0.44
per cent, followed by Food/Beverages to drop by 0.24 per cent; the
Banking moved up by 0.21 per cent while the NSE Insurance, the only
gainer, appreciated by 1.19 per cent.

Commenting on the
insurance sector performance, Mr Adonri said, “Corporate earnings in
the sector appear to be getting better. I think the insurance
sub-sector is presently seeing light.”

He said the sector had suffered what is technically called a fatigue after a long period of rally.

Most active

Banking sector led
the market transaction volume today with 174.41 million units valued at
N1.71 billion exchanged in 3,258 deals as against 157.48million units
valued at N1.28 billion exchanged in 3,213 deals recorded yesterday.

The volume recorded
in the sector was driven by transaction in the shares of Zenith Bank,
UBA, First Bank and Access Bank and the total volume of 104.60 million
units valued at N1.23 billion traded in the shares of the four stocks
accounted for 37.76 per cent of the entire market volume and their
value represented 46 per cent of the market’s value.

Transaction volume
on the exchange climbed by 22.81 per cent to close at 277.00 million
units exchanged in 5,711 deals as against a decline by -35.61% recorded
previous trading to close at 225.54 million units exchanged in 5,195
deals.

Mobil Producing
Nigeria Unlimited (MPN), a subsidiary of Exxon Mobil Corporation, in
joint venture with Nigerian National Petroleum Corporation (NNPC), on
Monday, announced a rich gas condensate discovery in Oil Mining License
(OML) 104, approximately 75 kilometres offshore of Akwa Ibom State.

The Pegi-1
discovery well was drilled in 315 feet (96 metres) of water to a total
depth of 11,407 feet (3,477 metres) beneath the Awawa Field and
encountered 165 net feet (50.3 metres) of rich gas condensate.

Analysis of
recovered samples indicates an API gravity of approximately 41 degrees.
Significant additional potential remains in untested deeper targets
within the Pegi fault block as well as in adjacent fault blocks.

The Pegi discovery
is part of ExxonMobil and NNPC’s programme to increase oil and gas
reserves and production capacity, and to supply power and natural gas
to the growing Nigerian domestic market. Pending results from
additional exploration planned in the area, development studies will
determine the optimal plan for bringing these newly discovered
resources into production.

“This is another
example of our commitment to the growth of the oil and gas industry in
Nigeria,” said, Mark Ward, chairman and managing director of Mobil
Producing Nigeria Unlimited.

“We are focused on
developing oil and gas reserves, and supplying natural gas that will
boost commercial power production, in line with the Federal
Government’s aspiration,” he added.

Rich gas condensate
is a natural gas liquid containing a high percentage of heavier
hydrocarbon molecules such as butane and pentane.

First Hydrocarbon
Nigeria Limited (FHN) has announced the acquisition of an equity
interest in the company by African Capital Alliance (ACA), a leading
Nigerian private equity firm.

The investment in
the company is non dilutive to existing shareholders, while ACA is
committed to lending further support to other FHN projects in Nigeria.

ACA is an
independent private equity firm, with $550 million under management,
investing in West Africa, principally in Nigeria and the Gulf of Guinea.

FHN was established
in 2009 with the objective of increasing indigenous involvement in the
upstream sector of the oil and gas industry.

Magaji Muhammed
Inuwa, director of FHN, said, “ACA’s reputation for investing in, and
supporting the growth of Nigerian ventures across all sectors is well
recognised, and we look forward to working with them to deliver on
FHN’s vision of increasing indigenous ownership in the upstream sector
of the Nigerian economy.”

Paul Kokoricha,
director of ACA, said, “The opportunity to invest in FHN is directly
aligned to our growth investment strategy and commitment to provide
support to develop the Nigerian indigenous sector.

“The obstacles to indigenous success in the upstream sector are well
known and FHN’s combination of access to Nigerian capital, growth of
indigenous capacity, as well as the technical and operational
excellence provided by their partner, Afren, is a strong basis for
success.”

Grand Oak Limited,
the manufacturers of Calypso coconut drink, has intensified the
company’s Corporate Social Responsibility(CSR) initiatives through
reaching out to their core target, the youth.

This formed the
basis of the Calypso welcome party, which was aimed at meeting the
desired needs of the target consumers for entertainment, fun, and
pleasure.

The CSR initiative
is a veritable platform to create the sense of oneness in National
Youth Service Corp members who have different socio-cultural
backgrounds. The programme, which is an annual event, provides an
avenue for the youth corp members to showcase their talents and innate
potentials, with reward of home appliances by the company.

The event, which
was tagged ‘Calypso fun night’ is to ensure the youth corp members
enjoy a wonderful and interesting period while in their orientation
camp. The company sponsors the event on a yearly basis.

In today’s world
news moves faster than it ever has at any point in history, and the
demand for 24 hour news has fuelled a lot of competition between
traditional journalists and bloggers who generally take sides in a
story. The question is how can people keep up in this ‘world gone mad’?

A news aggregator
is a programme that takes a list of websites that you want to monitor,
and collects news from them on your behalf, constantly alerting you
when something new happens. Aggregators do this by subscribing to RSS
feeds. RSS (meaning Really Simple Syndication), is an XML based feed
language.

There are many RSS
programmes out in the wild, but my personal favourite is the Firefox
extension, Newsfox. If you are a KDE 4.x user, there is a programme
that I’m currently playing with called RSSNow, a nice little plasmoid
that displays your feeds in a ticker format scrolling across your
desktop. Pretty cool.

However, the RSS
programme we are interested in today is called Miro. Miro is an open
source Internet television programme that can deliver HD video and
audio. Its killer feature is that as an aggregator, it can keep track
of the latest episodes of your favourite TV programmes and work as a
digital video recorder. It can download that recent episode of Tinsel
if it is available online. This means that you can watch your programme
later on, if as is the case with most Internet connections around these
parts your live stream keeps lagging or breaking up.

The default setting
is to save the videos for up to six days, but you have the option of
saving permanently. Miro can also play videos in full-screen so that
boys can gather around to watch Stoke beat Manchester United. It also
has a built-in TV guide and a community (open source is heavy on
communities) rating system.

Positive attributes

Asides its RSS
programme, Miro incorporates a bit-torrent client, and depending on
your platform, a media player (Xine for Linux, VLC for Windows or
QuickTime for Mac). Another nice attribute of Miro is that it supports
the most popular video formats in use. This means that it can also
function as a great video/audio player when you are offline, no need to
start exploring the backwaters of the Internet for the right codecs to
play that matroska file. As a bonus, Participatory Culture Foundation,
the makers of Miro also offer another free programme, Miro Video
Converter. No prizes for guessing what that one does…

So why not fire up that browser and give it a try?