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Insurance stocks top losers’ table in September

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Insurance stocks top losers’ table in September

Insurance stocks top losers’ table in September

The recapitalisation exercise recently announced by the National Insurance Commission (NAICOM) took a toll on insurance stocks in September with majority of them recording price depreciation.

Data obtained by the News Agency of Nigeria (NAN) from the Nigerian Stock Exchange (NSE) in Lagos showed that insurance equities dominated the losers’ table with Universal Insurance emerging the worst performing stock.

Universal Insurance emerged the worst performing stock in September in percentage terms with a loss of 42.50 per cent to close at 23k per share.

It was trailed by AXA Mansard Insurance with 23.53 per cent to close at N1.95, while Cornerstone Insurance dipped 20 per cent to close at 22k per share.

Flour Mills shed 19.35 per cent to close at N20, while Cement Company of Northern Nigeria (CCNN) lost 18.12 per cent to close at N25.30 per cent.

Other top losers were Lafarge Africa, Niger Insurance, Royal Exchange Assurance, Japaul Oil and NAHCO.

Consequently, the All-Share Index during the period shed 2,082.08 points or 5.97 per cent to close at 32,766.37 compared with 34,848.45 achieved in August.

On the other hand, Union Diagnostic was the best performing stock in percentage terms during the period under review with a growth of 30.77 per cent to close at 34k per share.

UACN Property came second with 24.20 per cent to close at N1.95, while C & I Leasing increased by 20.80 per cent to close at N3.02 per cent.

Other top gainers were Unity Bank, Regency Alliance Insurance, First Aluminum, Sterling Bank, Veritas Kapital Assurance, Neimeth and AIICO Insurance.

In all, the volume of shares traded dropped by 23.15 per cent as investors bought and sold 4.15 billion shares worth N 65. 10 billion in 62,693 deals.

NAN reports that this was against a turnover of 5.40 billion shares valued at N66.92 billion traded in 68,906 deals in August.

Commenting on the performance of the market, Prof. Sheriffdeen Tella of the Economics department, Olabisi Onabanjo University, Ago-Iwoye, Ogun, told NAN that the insurance recapitalisation exercise contributed to the losses recorded by some insurance stocks.

Tella said the market was largely bearish and was caused by the withdrawal of funds from foreign sources.

“The portfolio investment is more often than not dominated by foreign investors who react easily to world prices and withdraw or inject fund at will.

“There is the need to encourage more local investors, particularly corporate investors like multinationals in telecommunication and hospitality subsectors through some incentives.

“This also has a way of deepening the market, building confidence and making the market more active,” he said.

Tella said trading activities would likely be bullish in the current month when compared with September on macroeconomic stability and full implementation of the 2018 budget.

Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd. said the peaceful conduct of primary election by the major political parties would likely boost foreign investors’ confidence.

Kurfi expressed optimism that the peaceful conduct of primaries would enable foreign investors to predict the direction of 2019 general elections.

Also speaking, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd. , attributed the development to increased sell-off caused by heightening political risk ahead of the 2019 general elections.

Omordion said the political risk seemed outside the control of traders and regulators which made investors to tarry.

He added that the tardiness in the implementation of the 2018 capital budget contributed to the loss posted by the market during the review period.

According to him, mixed economic data released within the period by the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) contributed to the development.

Omordion said the recent decline in the inflation rate to 11.23 per cent in August from 11.14 achieved in July, after 18 consecutive months of steady decline signaled a rise in the price of food items.

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Perform or get fired – EEDC chairman, Emeka Ofor to staff

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The Enugu Electricity Distribution Company, EEDC, has declared that it would no longer condone incompetent members of staff.

It has, therefore, vowed that such staff would be disengaged and new ones recruited to meet the company’s target of quality service to the people.

The chairman of the company, Chief Emeka Ofor, made this known during the EEDC maiden special recognition of some of its staff.

At the event held in Enugu, Chief Ofor commended the 22 members of staff for their efforts to improve the service delivery to customers, urging them to double their effort to support the company.

Offor, who lamented the huge amount invested in the company without any dividend for five years, disclosed that the company has only achieved 6% of its target in 5 years.

He said that some staff contributed to the loss as they connived with customers who don’t want to pay their bill and turn their eyes from what they were supposed to do.

“Today, we are at the final stage of 2018; we took over this company in November 2013. When the Federal Government, FG, was handing over the company to us, the intention was that the Disco will make progress and since then, we have been having a lot of issues.

“From 2013 to 2018 is 5 years and we have been able to achieve 6% of our target, which means what we are achieving is not acceptable before me.

“We have a lot of issues that we are passing through because you have people who are not doing exactly what they should do,”he said..

Bemoaning the high rate of power theft, he said, “We have members of staff who connive with customers who don’t want to pay their bills, we have some who are neck deep in corruption, we have some who turn their eyes in what they are supposed to do and do illegal connections, that is what is causing these problems,”

“I have no regret but by January 2019, the game is going to change and it must change for good. We have people who are doing these works and you can see that some of those people are inefficient and not doing what they are supposed to be doing. We will have no option, instead of keeping these people, we will look for competent hands to support the company or else we lose the investment”, Ofor said.

Earlier in an address by the Managing director, Okey Nwosu, commended the beneficiaries for their effort towards achieving success and urged those who couldn’t meet the criteria to show commitment.

Nwosu regretted the death of one of the staff in the line of duty and disclosed that the company had launched safety initiative to make sure that the staff would be completely accident free while discharging their duties.

He pointed out that the company would make the safety tips discussion as the first interaction in any gathering by the company to allow the staff internalise the important of safety.

Nwosa, who disclosed that the company would become the number one electricity distribution company in the country, stated that they would use all the indices to attain success.

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2019 Budget Presentation: NANS appeal to PASAN to shelve strike

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The National Asoociation of Nigerian Students (NANS), has appealed to National Assembly Workers, under the aegis of Parliamentary Staff Association of Nigeria (PASAN), to shelve their ongoing strike.

Business activities at the National Assembly complex ,Abuja was paralysed on Monday, as members of PASAN commenced a 4-day warning strike which will run till Thursday.

The National Assembly workers are demanding payment of their outstanding salary arrears, allowances and other welfare packages.

NANS National Public Relations Officer, Mr Bestman Okereafor, made the appeal in in Enugu.

Okereafor said that the ongoing strike would cause a major setback as regards the 2019 National Budget Presentation by President Muhammadu Buhari on Wednesday, to a joint session of parliamentarians.

He noted that if not checked, the strike would affect the 2019 appropriation if relevant agencies and government offices concerned do not find lasting solutions to the demand of the PASAN members.

According to him, this is coming in the face of the consistent industrial actions embarked upon by various unions in the different sectors, especially in the education sector.

NAN’s image maker expressed concern that the negative development of the various strike in the education sector was becoming absolutely unbearable for Nigerian students.

“It is no more news that the Academic Staff Union Of Polytechnics (ASUP) has also joined the league, even as Academic Staff Union of Universities (ASUU) is still on strike.

“Yet, PASAN has shut down the National Assembly over a mirage of issues and this shut down will definitely affect the proposed 2019 Budget Presentation by Mr President on Dec. 19.

“If the presentation is delayed and presented next year, there will be spiral negative effect of the late presentation on our economy generally,’’ he said.

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Challenge in Electricity Sector is Lack of Cost-Effective-Tariff, Expert Says

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*Faults minister’s stance on lack of electricity

An Energy Expert, Mr. Ettu Mohammed, has said the lack of electricity in the country is due largely to the lack of cost effective tariff in the procurement of electricity across its entire value chain.

Reacting to a recent report published in some national dailies, Mohammed, in a statement recently, faulted the Minister of Power, Works and Housing, Mr. Babatunde Fashola SAN, on his alleged comment that “It is not FG’s problem if Nigerians lack electricity.”

The energy expert averred that the minister’s comment was shocking to Nigerians because it did not acknowledge the true situation which is that the federal government has 40 percent stake in both the Discos and GenCos and a 100 percent stake in TCN, stressing that the problem confronting the sector should be shared on the basis of 60 to 40 ratio, adding, that inconsistency has trailed the last three years of the ministry with regards to power supply.

Mohammed said: “On the other hand, one of the most important issues affecting the sector’s success – a cost reflective tariff – gets almost no mention at all. How can the issues be fixed if we keep avoiding the major problem?”

While attributing issues on the state of the economy, he explained that PHCN was sold to its successor companies, followed by the devaluation of the Naira, energy was sold for between N25-N36/kWh which is equivalent to 18.4¢/kWh, stressing that this value is at par with many countries on the planet.

“The minister forgot to inform Nigerians that the power sector is 100% import-dependent, hence the devaluation had a devastating effect on the sector’s revenue expense-wise but nothing changed on the income side despite the devaluation.

“Today, energy is sold for between N25-36/kWh which is now equivalent to 8.4¢/kWh. That is over 54% loss against a business which is 100% import dependent. How will they survive?

He acknowledged that the current license holders may not be as technically savvy as we will prefer them to be but this single adverse financial challenge is sufficient to kill any form of investment in any sector regardless of the technical competence of its operators.

“They will continually be engaged in a losing struggle to recoup their initial investment as well as pay off the debts they owe banks and other sources from where they got funds from.” he said.

Mohammed also accused the ministry of not making efforts to check energy theft through sustainable and enforceable policies that will address the problem.

He averred: “While I cannot question the honorable minister’s prowess in law and jurisprudence, a critical sector like the power sector needs a technical hand …preferably an Electrical Engineer. I believe this is the main reason why he has kept pushing a narrative of a phantom 2,000MW stranded power which is non-existent or an acclaimed accomplishment of 7,000 MW generation capacity whereas we already had the capacity to generate 6.2GW as at 2014 and yet we remain saddled with gas constraints and a weak wheeling network which has not improved substantially in the last four years.

“Before we go any further, here are some facts. As at 2013, Nigeria was wheeling 3,000MW-plus on the transmission grid. This is still the same average we are battling with in 2018. It is instructive and worrisome to say Nigeria has not wheeled 4000MW averagely in our 58 years of existence. The one-off incident where we wheeled over 5,000MW on only one day does not count.”

According to him, the data of the wheeled and generated energy since 2013 is available on NERC website captioned as daily energy watch for Nigerians to see.

Electricity consumption per capita, according to him, has dropped because it is recorded against the nation’s growing population, adding: “There is at least 8% loss on wheeling and distribution and another 10% is exported to our neighbors leaving Nigerians to battle with less than 3,000MW. All over Africa, nations are building power plants in record time as Egypt just unveiled a 14.4GW plant in 27.5 months for less than $6.5 billion.”

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