Sec Quartely Publication 3Rd Quarter, 2012

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Sec Quartely Publication 3Rd Quarter, 2012 1 SEC QUARTELY PUBLICATION 3RD QUARTER, 2012 2 TABLE OF CONTENT S/N DEPARTMENTS 02 PRIMARY AND SECONDARY MARKETS 15 MONITORING AND INVESTIGATION (MI) 28 SECURITIES AND INVESTMENTS SERVICES (SIS) 39 FINANCIAL STANDARD AND CORPORATE GOVERNANCE (FS&CG) 41 COLLECTIVE INVESTMENT SCHEMES (CIS) 51 LEGAL 61 ENFORCEMENT AND COMPLIANCE (E&C) 62 REGISTRATION AND RECOGNISED INVESTMENT EXCHANGES (RRIE) ACTIVITIES OF ZONAL OFFICES 68 IBADAN 70 KADUNA 71 KANO 73 ONITSHA 79 PORT HARCOURT 81 LAGOS 3 PRIMARY AND SECONDARY MARKET NEW ISSUES Just like the two preceeding quarters, the new issues floated in the third quarter of 2012 were dominantly Federal Government of Nigeria (FGN) bonds. Out of it, ten (10) new issues were recorded in the quarter, eight (8) were FGN bonds, accounting for about 96% (N210 billion) of the total value of issues which stood at N219.12 billion. The two other issues floated were equities valued at N9.12 billion. TABLE 1: SUMMARY OF NEW ISSUES IN THE THIRD QUARTER OF 2012 Mode of Offer No. of Issues Value of Shares(N’ m) Rights 1 5,523.09 Special Placement 1 3,600.00 Total Equities 2 9,123.09 Corporate Bond 0 0.00 Sub-national Bond 0 0.00 FGN Bonds 8 210,000.00 Total Debt 8 210,000.00 Overall 10 219,123.09 Source: SEC, DMO The trend in new issues so far in 2012 showed investor preference for FGN bonds due to favorable returns placed on the bonds. This had however made bond issuance very expensive to other issuers (State Governments and Companies) that had to benchmark against FGN bonds in addition to interest rate and inflation to attract investors. Twelve (12) months after it was increased by the Monetary Policy Committee (MPC), the Monetary Policy Rate (MPR) remained at 12% as at end of third quarter 2012 while the inflation rate was still double digit. There were expectations that the market might witness new issues in the last quarter of the year, considering a few equity and fixed income applications being processed by the Commission. In the reviewed quarter, the Commission approved shelf bond programs for two state governments, Gombe State (N30 billion) and Rivers State (N250 billion). Find a summary of the two (2) equities issued in third quarter including issuers statements on utilization of proceeds below: 4 Aso Savings & Loans Plc The mortgage institution floated a rights offer of 11.04 billion ordinary shares of 50k each at N0.50 per share, amounting to N5.52 billion. The proceeds, after deduction of the cost of issuance, would be applied in the following proportion; o Electronic banking and upgrade of banking software – 6.0% o Information technology infrastructure and branch software upgrade – 6.0% o Branch expansion – 18.0% o Working capital – 20.0% o Mortgage/Real Estate construction – 50.0% JAIZ Bank Plc The bank made a special placement involving 3.60 billion ordinary shares of 50k each at N1.00 per share worth N3.60billion to enable it finance the following after deducting the cost of offer; o Branch expansion (opening of 15 branches in the North) – 46.35% o Information technology enhancement (ICT infrastructure for new branches and upgrade for the bank) – 13.65% o Working capital support – 40.00% TABLE 2: EQUITY NEW ISSUES IN THE THIRD QUARTER OF 2012 Opening Issue Offer Issuer Type Price Volume Value(N) Date Aso Savings & Loans Plc Rights 0.50 11,046,189,224 5,523,094,612.00 17/09/12 JAIZ Bank Plc Placement 1.00 3,600,000,000 3,600,000,000.00 28/09/12 Total 14,646,189,224 9,123,094,612.00 Source: SEC Table 3 below gives the details of the eight (8) FGN bonds auctioned by the DMO in the third quarter of 2012, three (3) each were issued in July and August, and two (2) in September. The issues, which were extensions of earlier issued bonds, were all oversubscribed. The total subscriptions on the bonds stood at N452.68 billion, indicating an excess of N242.68 billion (115.56%) over the required amount of N210 billion. 5 Table 3: AUCTION SUMMARY OF FGN BOND FOR THE THIRDQUARTER OF 2012 Level Amount Marginal Tenor Amount of Subs Amount Allotted Rate Auctioned Subscribed Date Maturity (Yrs) (N’Bn) (% ) (N’Bn) (N’Bn) (%) Auctioned April 27, 2017 (4th Issue) 5 25.00 164.12 41.03 25.00 15.10 18/07/12 June 29, 2019 (2nd Issue) 7 25.00 111.20 27.80 25.00 16.00 18/07/12 January 27, 2022 (7th Issue) 10 25.00 207.08 51.77 25.00 16.39 18/07/12 April 27, 2017 (5th Issue) 5 25.00 176.44 44.11 25.00 15.10 15/08/12 June 29, 2019 (3rd Issue) 7 25.00 283.88 70.97 25.00 16.00 15/08/12 January 27, 2022 (8th Issue) 10 25.00 536.12 134.03 25.00 16.39 15/08/12 April 27, 2017 (6th Issue) 5 30.00 121.33 36.40 30.00 15.10 19/09/12 June 29, 2019 (4th Issue) 7 30.00 155.23 46.57 30.00 16.00 19/09/12 Total 210.00 452.68 210.00 Source: Compiled from DMO Reports REGISTRATION OF OTHER SECURITIES Bonus Issues: The Commission registered six (6) bonus issues, involving over 6.61 billion shares with nominal value of N4.30 billion in the third quarter of 2012. The breakdown of the bonus issues is shown on Table 4 below. 6 Table 4: REGISTERED BONUS ISSUES IN THE THIRD QUARTER OF 2012 Nominal Value Date Bonus Company Volume (Unit) (Naira) Registered Ratio Dangote Cement Plc 1,549,137,036 774,568,518.00 16/07/12 1 for 10 United Bank for Africa Plc 646,693,873 323,346,936.50 18/07/12 1 for 50 First City Monument Bank Plc 2,483,617,573 1,241,808,786.50 23/07/12 3 for 20 Nigeria Aviation Handling Co. Plc 246,093,750 123,046,875.00 13/07/12 1 for 5 Unity Bank Plc 3,495,153,610 1,747,576,805.00 14/08/12 1 for 10 R. T. Briscoe (Nig) Plc 196,058,949 98,029,474.50 18/09/12 1 for 5 8,616,754,791 4,308,377,395.50 Source: SEC ALLOTMENT CLEARANCE The Commission cleared only one (1) allotment proposal in the quarter under review. This involved a rights offer issued by Niger Insurance Plc in February 2012. As shown on Table 5 below, the rights offer was 74.82% subscribed. Table 5: ALLOTMENT CLEARED IN THE THIRD QUARTER OF 2012 Offer Price Level Volume of of Amount Approval Issuer (N) Securities Value (N) Subs. capitalized Date Rights: Niger Insurance Plc 0.50 2,677,079,286 1,338,539,643.00 74.82% 1,001,440,448.50 06/07/12 Source: SEC SECONDARY MARKET Consolidating on the gains recorded in the second quarter, there were indications that prices of equities on the floor of the Nigerian Stock Exchange (NSE) appreciated generally in the third quarter. While the overall price indicator, All-Share Index (ASI), gained 4.59% in the second quarter, it recorded significant appreciation of 20.43% in the third quarter. However, the volume and value of transaction were lower in third quarter when compared with the figures in the second quarter. Details of activities and trend of market indices are as follows: 7 TRADING ACTIVITIES ON THE NIGERIAN STOCK EXCHANGE In the quarter under review, a little over 21.88 billion units of securities worth N157.85 billion exchanged hands in 262,288 deals. These represents declines of 17.40% and 8.39% in volume and value of securities traded respectively when compared with about 26.49 billion securities valued at N172.23 billion traded in the second quarter. Transaction during the quarter included 750 units of FGN bonds traded for about N0.552 million, 10,000 units of corporate bonds worth N0.946 million and 70,672 units of NewGold ETF sold for N181.79 million. Comparative summary of trading statistics in the second and third quarter of 2012 is given on Table 6 below. Table 6: COMPARATIVE SUMMARY OF TRADING STATISTICS IN THE SECOND & THIRD QUARTERS OF 2012 SECOND QUARTER 2012 THIRD QUARTER 2012 SECURI Volume Volume TIES Deals (Unit) Value (Naira) Deals (Unit) Value (Naira) Governme nt Bond 2 260 233,075.00 15 750 551,632.50 Corporate Bonds/Pr ef. Shares 0 0 0.00 1 10,000 946,410.00 Exchange Traded Fund (ETF)- Gold 91 78,469 95,241,615.50 140 70,672 181,790,503.00 238,04 26,491,589,8 172,226,078,574. 262,13 21,884,747,6 157,663,438,385 Equities 3 67 69 2 28 .36 238,13 26,491,668, 172,321,553,26 262,2 21,884,829, 157,846,726,9 TOTAL 6 596 5.19 88 050 30.86 Source: Compiled from reports supplied by The NSE Transactions by Sectors: With the volume and value of about 17.16 billion and N107.75 billion, the Financial Services sector controlled 78.42% and 68.26% of the quarter’s total volume and value of transaction respectively. The next active sector behind Financial Services was Consumer Goods sector (ASeM and Main Board), which accounted for 5.14% and 20.50% of the total value of transaction for the quarter. 8 As shown on Table 7 below, the most significant transaction behind that of Consumer Goods, in terms of volume, was the 0.885 billion ordinary shares recorded for Healthcare sector and in terms of value, N6.57 billion of Industrial Goods sector.
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