Here are the main news stories for this week. Since some are very long, I decided to use highlight and bullet the main points to make for easier reading:

Foreign Banks Grant Intercontinental Bank $2 Billion Confirming Line
Source – AllAfrica Posted to the web on Oct 20, 2008

1. More leading global financial institutions have established confirming lines of credit with Intercontinental Bank Plc, just as several existing lines are also being increased bringing its portfolio of such resources to $2.1billion.
2. The Belgium financial giant, ING, has opened a confirming line of $50 million with the Nigerian bank just as its German partner, BHF Bank, increased its credit lines for the bank to $15 million.
3. Among major global banks with similar relationships with Intercontinental Bank are, Citibank, Deutsche Bank, BNP Paribas, ANZ, Commerzbank, HSBC etc.
4. This development came at the heels of the bank’s impressive financial results for the half year ended August 31, 2008, which show gross earnings rising to N121 billion, representing a growth of over 99 per cent against the N60.9 billion achieved in the corresponding period of 2007.
5. Shareholders funds also rose to N213 billion, while deposit base stands at about N1 trillion.
6. The results, which were approved by the Nigerian Stock Exchange (NSE), last week also show a profit before tax of N24 billion, an increase of 63 per cent from N14.7 billion in the previous year.
7. Fitch Ratings, a leading global financial rating agency, has recently affirmed Intercontinental Bank Plc’s National Long-term ratings at A+. The interpretation, according to analysts, is that the bank is a low risk and very safe financial institution.
8. The agency also affirmed the bank’s international rating at B+, which is the highest for any Nigerian bank as at date by Fitch Ratings.
9. Standards & Poor (S &P), another leading international rating agency, has also pronounced the bank’s international rating as BB-, which is the highest for any Nigerian bank as Nigeria’s sovereign rating is capped at BB-.
10. The S & P Rating statement in London listed Intercontinental Bank’s strength as strong market position, robust funding and liquidity as well as good capitalisation.
11. According to S & P, “Intercontinental Bank is a tier 1 Nigerian bank with a good presence in the high end corporate, commercial, public and retail sectors. It was the first Nigerian bank to reach the N1 trillion deposit mark due to a strong retail deposit portfolio. Intercontinental funding and liquidity profile is robust with a large liquid asset cushion”.

May & Baker – Strengthened On Diversification, Scale
Source – AllAfrica

1. In its latest audited reports to December 31, 2007 May & Baker recorded a turnover of N3.859 billion from N2.253 billion achieved in the comparable period of 2006.
2. That represents positive variance by 71.3 percent. Profit before tax advanced by 49.5 percent to attain N398 million in 2007 against N266 million the previous year.
3. From principally pharmaceutical company status, M&B has spread tentacles to manufacturing, food production, diagnostics and medical equipment.
4. The new growth areas are expected to leapfrog the company’s earnings. Its instant noodles brand, Mimee was launched in March last year. It was followed by the launch of Crunchmee snack noodles. The two products have since penetrated many homes across the country and serving as revenue booster to M & B.
5. The acquisition of WHO standard drug production facility is another plus for the company, being in the WHO list of international suppliers. The organization can now bid and supply WHO sponsored drugs in Nigeria and offshore markets.
6. M & B became Africa’s first private vaccine production company in 2005 by acquiring 51 percent share in Biovaccines Nigeria Limited, a partnership with the Nigerian Federal Government.
7. Last year, it invested heavily in setting up an Anti-retroviral AVR plant to produce drugs for the HIV/AIDS pandemic. The plant has since commenced production and showing great prospects.
8. The pharmaceutical component of the company’s business generated a turnover of N2.6 billion at the end of the 2007 financial year, thereby passing a Gross Profit of N1.3 billion to the consolidated income statement.
9. The Food business driven by the fast selling Mimee and Chrunchmee recorded sales worth N1.2 billion on a gross profit of N224.5 million. The third income stream – water, released N70 million by turnover and N19 million in gross profit to the consolidated profit and loss account.
10. Net profit margin declined from 9.40 percent to 5.40 percent thereby shedding 24.60 for the full year.
11. The value of trade debtors increased almost two folds from N249 million to N734 million.
12. Bank overdrafts almost doubled from N395 million to N735 million just as the value of trade creditors increased by 60 percent to N341 million against N134 million the previous year.
13. May & Baker’s working capital position declined by 16.7 percent to N1.094 billion against a higher N1.313 billion in 2006. It was also noticed that cash balances at year end also dropped from N1.019 billion to N622 million.
14. Nevertheless, the company’s balance sheet remained strong during the review period with total assets less current liabilities of N2. 877 billion (2006: N2.977 billion) and a net worth of N2.615 billion (2006: 2.617 billion).
15. Profit after tax declined, to close at N208.3 million against N211.4 million in 2006.

Market capitalisation drops by N2.84trn in six months -SEC
Source – Businsses day

1. Financial crisis that hit the capital market has left in its trail a loss of N2.84 trillion or 23.5 percent between March and October, Securities and Exchange Commission (SEC) Monday told House of Representatives.
2. Prior to the crisis, market capitalisation of Nigerian Stock Exchange (NSE) was N12.1 trillion.
3. Alfaki Musa al-Faki, SEC director-general during a presentation on the “Capital market: Recent developments” to the House Committee on Capital Market, noted that during the six month period market capitalisation dipped by 23.5 percent from N12.1 trillion in March, when the price drop started to N9.26 trillion by October 15. Between January and October 15, it had gone down by 13.4 percent.
4. According to him, the NSE All Share Index also dropped from 63,016.6 point in March to 43,492.56 points, representing a decline of 31 percent as at October 15, while 25.7 percent was lost between January to October 15; loss of 25.7 percent was recorded between January and October 15.
5. Al-Faki, who argued that the slide was the normal trend in the capital market, emphasized the need for investors to engage in long-term investment rather than short-term.
6. The director general however noted that the market capitalisation grew from N2.5 trillion in 2005 to N12.1 trillion by March 2008, a five fold increase in five years, while the trading value also increased from N254.7 billion, a daily average of N1.06 in 2005 to N2.086 trillion, a daily average of N8.62 billion in 2007.
7. According to him, All Share index moved from 24,085 point as at December 2005 to 63,017 points at the end of March 2008, representing 161.64 percent, while new issues rose from N405.84 billion in 2005 to N1.34 trillion in 2007, representing 230.86 percent.
8. Udo Udoma, NSE chairman, while responding to questions on the ‘Market Makers’ from the members of the committee, explained that participation was open to banks and interested private sector operators, adding that the guidelines was not limited to only banks.
9. Statistics on the world stock exchanges index monitored by NSE between December 31 2007 and October 8, revealed thus: US (-30.2); China (-57.4); Japan (-32.8); France (-41.1); Germany (-42); Poland (-41.6); Russia (-66.7) while Turkey (-53.9), while Nigeria recorded -23.5 losses.
10. Other countries on the loser??s chart are South Africa (-46.4; Saudi Arabia (-44.5; Egypt (-43.6); Mexico (-44); Chile (-37.1); Brazil (-54.5); Singapore (-42.4); Malaysia (-36.5) India (-54.2); Nairobi -28.2; Congo -24.4, except Ghana which recorded a positive index of 64.
11. Some of interventions taken by government to address the lingering crisis include the inauguration of presidential advisory committee; issuance of an exemption to the provisions of relevant sections of the Companies and Allied Matters Act 1990, on share buy-backs to permit quoted companies to buy-back up to 20 percent of their shares by the office of attorney-general of the federation.
12. This, according to him, would require the approval of the SEC before any quoted company is allowed to undertake any share buy-back.
13. On its part, NSE had on Wednesday, August 27, slashed downward its fees by 50 percent, while arrangements are ongoing to establish a capital market stabilisation fund in order to effectively and prudently intervene in the nations stock market.
14. Aliyu Wadda, chairman of the House Committee, insisting on the need for government??s intervention, however warned government against use of tax money.
15. Wadda also explained that the Commission had no statutory right to jerk up the 15 percent share buy-back without the existing law, which regulates the operations of the commission.

CBN orders banks to submit account details of wonder banks
Source – Vanguard Posted to the web on Oct 22, 2008

1. The Central Bank of Nigeria (CBN) has directed banks to submit the account details of 28 fake finance companies/ fund managers also known as wonder banks
2. The companies are:
   Art Master & Co. Ltd;
   Cyber International Ltd;
   Fortune Access Interlinks Network;
   Gold Power Unique Services Ltd;
   Gorutrans Nigeria Co. Ltd;
   Interglobal Investment Ltd;Money Field Ltd;
   New Freedom Diversified Investment Ltd;
   Open Gate Multipurpose Investors Ltd;
   Orion Express Global Services Ltd;
   Pennywise Investment Ltd;
   Positive Move International Nigeria Ltd;
   Precious Golden Profile;
   Real and Cool Wealth International Ltd;
   Shola Olanrewaju Ayinke (Sefteg Nigeria Company);
   Silvertrust Global Investment;
   Successpoint International Investment Ltd;
   Torid Investment Ltd;
   Treasured Fund Assets Ltd;
   Vikel Petroleum Ltd;
   Wealth Concepts Global Ltd;
   Wealthgage Multibiz Int. Ltd;
   Wealth Interlink Agency Ltd;
   Wealth Solution Ltd;
   Wealth Transfer and Logistic Ltd;
   Wilson O. Wilson (Doing business in the name and style of Wilamas Ventures) Wisdom Investments Nigeria Ltd;
   Nospetco Oil and Gas Ltd.”

Okitipupa reduces debt profile
Source – Guardian Newspapers

1. DESPITE a low capital base of N48 million, Okitipupa Oil Palm Plc has succeeded in reducing its accumulated losses from N241.6 million as at December 31, 2003 to N147.4 million as at December 31, 2007.
2. The chairman of the company, Vice Admiral Akin Aduwo (rtd), while addressing shareholders at its yearly general meeting in Akure recently, explained that the company, which has been under receivership until April 15, 2004, during which income and expenditure of the company were prepared by limited liability companies, has returned to profit making in 2004, eight months after the repositioning exercise.
3. By the new management of the company in rehabilitating the plantations, as well as the Ipoko Mills-in-house to consolidate on this, the chairman said the company is putting measures in place to rescue the company’s plantation from being exploited by unauthorised persons.
4. He added that the board of directors of the company could not recommend dividend to the shareholders due to the losses incurred in the past years.
5. On the future plans of the company, Aduwo said the company would commence a complete elimination of unwanted trees in more than 8,000 hectares of plantation, after which the company would company would embark on the modernisation of the Okitipupa and Ipoko Mills cable, which according to him is capable of processing 25 tones of fresh fruit bunches in at tour.
6. The energy saving project of the company, made through the conversion of wastes to generate steam and electricity would also be included.
7. The project, when completed would generate profit; enhance steady growth and help to reduce the accumulated losses of the past years.

Chams set to make world record in ICT market
Source – Guardian Newspapers

1. IN a strategic move to attain the Vision 2020 goal of the Federal Government in the ICT sector, Chams Nigeria Plc, in Lagos, launched ChamsCity Network into the ICT market.
2. According to the Assistant General Manager, ChamsCity, Chams Plc, Mr. Sola Bickersteth explained that the company was set to commission the world’s largest ICT centres, starting with Lagos and Abuja before the end of this year and every major city across Nigeria before end of 2009.
3. Sola said that the centres would demonstrate various futuristic services such as digital identity management and electronic payment solutions that the company was well known for.
4. Sola explained that each centre will be equipped with about 1,000 computers, which are higher than the present record setting location in New York City that contains 850 computers, according to the Guinness book of world records.
5. The Managing Director of Supercard, Mr. Femi Williams said access to each centre would be only after registering your fingerprint in the centre’s database and using a bank card to create a virtual wallet for payment of services within the ChamsCity location.
6. Williams added that regarding the registering of biometrics information of all visitors to ChamsCity, the challenges posed by 419 will be easily addressed as every visitor would be accounted for, right from the time of entrance to the computer used and online activities.
7. “The same biometric technology has been successfully used by the company in partnership with some European embassies to weed out fraudulent visa applicants,” he said.
8. The network is designed to empower government agencies, education institutions, professional organisations and associations, financial institutions, IT service providers, corporate organisations and even small businesses to experience economic growth by being able to provide more efficient services to large populations and customers using information and communications technology, specifically, identity management, electronic payments and online transactions system.
9. ChamsCity locations are ideal for state governments, who wish to conduct digital citizen registration, mass social service enrolments, electronic payment collections etc.
10. Educational institutions, who wish to conduct online classes and entrance tests and regular examinations, large corporations conducting pre-qualification employee tests and staff training, utility and telecoms services providers wishing to provide online bill payment and pre-paid services, service providers wishing to extend their services to multiple locations, embassies that wish to conduct visa screening exercises, event managers wishing to sell tickets online, Conference managers using modern ICT tools.
11. Chams Plc, the largest provider of digital identification systems in Nigeria and an operator of the new General Multi-Purpose Identification Card in partnership with the Federal Government of Nigeria.

SEC, NSE meet to review capital market
Source – Guardian Newspapers

1. The Board of the Securities and Exchange Commission (SEC) and the Council of the Nigerian Stock Exchange (NSE), yesterday, met to review the situation in the Nigerian capital market.
2. In a statement made available to The Guardian in Lagos yesterday by the SEC’s spokesman, Mr Lanre Oloyi, stakeholders in the Nigerian capital market, met yesterday to review the current meltdown in the Nigerian Stock Exchange.
3. According to him, the meeting, which was held at the Commission’s corporate headquarters in Abuja, yesterday, saw the stakeholders reviewing the performance of listed companies on the Exchange.
4. “The Board of the Securities and Exchange Commission (SEC) led by its Chairman, Senator Udoma Udo Udoma accompanied by the Director-General, Musa Al-Faki and other Executive and Non-Executive Commissioners yesterday, met with the Council of the Nigerian Stock Exchange (NSE) to review the situation in the Nigerian capital market”, he said.
5. The meeting also had in attendance, the President of the Council of the Exchange, Chief Oba Otudeko, the Vice President, Alh. Aliko Dangote, the Director-General, Prof. Ndi Okereke-Onyiuke and other members of the council.
6. The statement reads: “At the end of the meeting, the SEC and the NSE expressed satisfaction with the performance of the companies listed on the Exchange as shown by their various results up to the last quarter”.
7. “The SEC and the NSE are of the view that the capital market will soon pick up in response to the positive performance of the companies”, it added.

IFC converts Access Bank’s debt into equity
Source – Guardian Newspapers

1. THE Nigerian capital market has received a boost with the International Finance Corporation (IFC) converting its debt stake in Access Bank Plc into equity.
2. The News Agency of Nigeria (NAN) reports that the regulatory agents of the capital market have welcomed the announcement by IFC of the decision to convert the debt to equity.
3. The IFC had in 2006 advanced a $15-million Unsecured Variable Rate Redeemable Convertible Loan Stock to Access Bank. The conversion saw additional 71,756,590 new shares of Access Bank added to the existing shares of the bank quoted on the Nigerian Stock Exchange.
4. NAN gathered that the move by the IFC followed the growing profile of Access Bank and its prospects in the Nigerian economy.
5. Reacting to the conversion, the National Co-ordinator of the Independent Shareholders Association (ISAN), Mr. Sunny Nwosu said that the conversion was a remarkable development for Access Bank and the Nigerian capital market.
6. “ISAN appreciates the position of IFC in the emerging markets, particularly the Nigerian capital market. The conversion will also go a long way to attest to the nation’s good economic fundamentals and the need for investors’ confidence,” Nwosu said.
7. “If IFC is converting its debt to equity in Access Bank now, it shows the highest sense of confidence on the Nigerian economy in the international arena,” he said.
8. NAN recalls that Access Bank had last week opened its UK office, following authorisation in August by the Financial Services Authorities (FSA) to operate a full service-banking subsidiary in the UK.
9. The Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo had endorsed the offshore banking of Access Bank and assured that the bank would go places given its pedigree and reputation in terms of the quality of its staff and exceptional services of the bank.
10. He said that the bank would soon become a role model to other banks in view of its acceleration locally and internationally within a very short period of operation.