- FCMB’s shareholders approve N150bn capital raise for recapitalization
The local equities market began the week on a positive trajectory on Monday, with the benchmark index climbing by 0.26 percent to close at 97,864.65 points.
This increase in the index led to a corresponding rise in the market capitalization of listed equities, which reached N55.36 trillion, pushing the year-to-date return of the index to 30.88 percent.
Despite the overall market gains, the session recorded more losers (22) than gainers (15).
However, investors still achieved a total gain of N142.63 billion. Trading activity presented a mixed picture. The total traded volume and value saw significant declines, dropping by 53.31 percent and 63.15 percent to 359.09 million units and N5.8 billion, respectively.
Conversely, the number of total deals rose by 3.90 percent, amounting to 7,881 trades.
Sectoral performance was largely bullish, with the Banking, Consumer Goods, and Oil/Gas indices increasing by 2.45 percent, 0.15 percent, and 1.02 percent, respectively.
However, the Insurance and Industrial Goods sectors experienced mild declines of 0.72% and 0.001 percent, respectively.
In terms of individual stock performance, notable gains were observed in JOHNHOLT (9.60%), FIDELITYBANK (8.43%), CONOIL (8.36%), MBENEFIT (7.69%), and JAIZBANK (6.02%).
On the flip side, significant declines were recorded for CAVERTON (-10.00%), CWG (-10.00%), CILEASING (-9.01%), FTNCOCOA (-8.33%), and RTBRISCOE (-8.33%). ACCESSCORP emerged as the most traded security in terms of both volume and value, with 176.23 million units exchanged across 602 trades, amounting to a total value of N2.99 billion.
In the money market, the overnight Nigerian Interbank Offered Rate declined by 1.00 percent to 31.25 percent, indicating liquidity ease in the financial system. Key money market rates such as the Open Repo Rate and Overnight Lending Rate also declined, closing at 30.69 percent and 31.44 percent, respectively.
In the Nigerian Interbank Treasury Bills True Yield space, rates closed with varied movements. The 1-month and 3-month tenors increased by 58 basis points (bps) and 23bps, respectively, while the 6- month and 12-month tenors decreased by 6bps and 9bps, respectively.
The secondary market for Nigerian Treasury Bills was active and bullish, driven by strong buy sentiment across short, mid, and long tenors, which led to a 32bps drop in the average T-bills yield to 20.39 percent.
In the bond market, secondary market activity for FGN Bonds was mildly bearish, resulting in a 2bps increase in the average secondary market yield to 18.69 percent. The sovereign Eurobonds market displayed a slightly bearish trend, with the average yield inching up by 0.01 percent to reach 9.98 percent.
In the foreign exchange market, the Naira appreciated by 9.68 percent in the official NAFEM market, trading at ₦1,339.33 per dollar on Monday.
However, the parallel market saw the Naira weaken by 0.40 percent, ending at N1, 500 per dollar.
FCMB’s shareholders approve N150bn capital raise for recapitalization
Shareholders of FCMB Group Plc, one of Nigeria’s leading financial groups have permitted the Board to raise N150 billion in fresh capital through any convenient financial instrument it may opt for.
The resolution alongside others was passed at the Annual General Meeting of the Group held recently in Lagos.
A statement signed by Olufunmilayo Adedibu, Company Secretary of FCMB Group also disclosed that shareholders approved the payment of a dividend of more than N9.9 billion for the financial year ended December 31, 2023. The dividend translates to 50 kobo per share.
According to Adedibu, shareholders passed the resolution, “That the Company be and is hereby authorized to raise additional capital of up to ₦150,000,000,000.00, (One Hundred and Fifty Billion Naira) or its equivalent in such other currency as the directors may decide, through the issuance of securities comprising ordinary shares, preference shares, convertible or non-convertible notes, bonds or any other instruments, in the Nigerian and/or international capital markets, either as a standalone issue(s) or by the establishment of capital raising programme(s), whether by way of public offerings, private placements, rights issues and/or such other transaction modes, at price(s), coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods, in such tranches, series or proportions, within such maturity periods and at such dates and upon such terms and conditions, as may be determined by the Board of Directors (the “Board” or the “Directors”) subject to obtaining the requisite approvals of the relevant regulatory authorities.”
The Board was empowered to take the necessary steps to cancel any unallotted shares of the Company and to further increase the share capital of the Company to an amount sufficient to enable it to meet the statutory minimum capital requirement as may be necessary pursuant to the foregoing resolutions.
The move to raise additional capital is in line with the directive of the Central Bank of Nigeria for banks to increase their capital.
The CBN raised the minimum capital requirements for Nigerian deposit money banks on March 28, 2024, citing the need to engender the emergence of stronger, healthier and more resilient banks to support the achievement of a $1 trillion economy by 2030.
Under the new policy, commercial banks with international operations need a minimum capital base of N500 billion, while those with national and regional authorizations require N200 billion and N50 billion respectively. Merchant banks now have a minimum capital base requirement of N50 billion, and non-interest banks need N20 billion for national operations and N10 billion for regional operations. Existing banks must meet the new requirements by March 31, 2026, a 24-month compliance window.