Courtesy of CSL Securities, here are the major news stories for this week:

We are still discussing with First Bank – Ecobank
The first merger talk was with First Bank which started in 2005. The First Bank transaction was a very interesting transaction because it was meant to give scale to Ecobank in Nigeria and give scale to First Bank in the rest of Africa. So there was something in it for the two institutions. Unfortunately, because of the size of the transaction, and being the first of its kind in this country and the fact that if involved various countries and various governments, it was difficult to complete that transaction as early as you would complete an in-country transaction. The transaction is not over, however as discussions are still on-going. The second one, which was more Ecobank Nigeria than Ecobank Transactional was with Unity Bank. We could not move ahead within the time frame we had determined for ourselves the proposed partner’s accounts were still being approved because of the large number of banks that came together in their merger arrangement. Then we went to Sterling Bank. We did a lot of work in this transaction. But you know that mergers between institutions with diverse share holding could also be complicated. We could not agree on some issues and so that deal was put on hold. Tomorrow, we can go back to them, but I can assure you, the First Bank transaction is still ongoing.

Access Bank to commence operations in UK
Access Bank plc has recorded yet another major milestone in its global expansion drive following its licensing and authorisation by the Financial Services Authorities (FSA) to operate a full service banking subsidiary in the United Kingdom. The Access Bank (UK) Ltd has its head office at no 1, Cornhill in the City London, overlooking the bank of England. The Bank’s Mayfair office is well located at 53, Davies Street, London. The new UK subsidiary will offer a full range of banking services, which include corporate banking, personal banking, treasury and trade finance. Aigboje Aig – Imoukhuede, chairman of The Access Bank UK and Group chief executive of Access Bank plc, commented that “Our commencement of business within the European union will perfectly complement our ongoing expansion across Africa and provide a platform for us to actualize our vision of attaining world – class status “Consistent with its growing reputation as Africa’s bank of Best Practice, the Bank has assembled a high caliber board of directors, comprising of well respected and experienced international Bankers, accountants and legal experts. The seven-man board includes two independent directors: Messrs. Derek Ross and Tim Wade. Their appointment attests to the bank’s readiness to operate at the highest standards of corporate governance; as both individuals are accomplished professionals with enviable track records.

Growing insurance beyond underwriting impacts on capital market
In the next few  months, no fewer than 10 insurance companies would approach the capital market to raise additional funds. A number of the insurance companies are gearing to increase their capacity in terms of capital base to enable them play as conglomerates in the financial services market.Since the conclusion of its recapitalisation and consolidation in 2007, there appears to be a reawakening of the industry players on what enhanced capital could do to the growth of their business, an idea it had kicked against when the plan for increase in capital base was first hatched in 2006 by then former minister of Finance, Ngozi Okonjo-Iweala. The impact of the last recapitalisation cannot be over-emphasised looking at the performance record of the companies in 2007 in terms of income generation.Besides that, the new capital has enabled a number of companies build attractive corporate head offices like their banking counterparts; expand internationally; open local branches and, most importantly, establish subsidiaries.Today, two insurance companies, Crusader Insurance Plc and S A Insurance have grown beyond insurance and are now listed as financial services sector on the quoted sectors list at the Nigerian Stock Exchange (NSE).

Industrial Crisis Looms as Gas Price Hits the Roof
The Manufacturers Asso-ciation of Nigeria (MAN) has said over 100 manufacturing companies in the country could be shut down with 50,000 employees thrown out of work if Gaslink Nigeria Limited implements its recent decision to raise the price of industrial gas by over 200 per cent.MAN said yesterday in Lagos that Gaslink, a subsidiary of Oando Plc, was “set to put the last nail on the coffin of the dying Nigerian manufacturing sector by increasing the price of industrial gas from N21.05 per scm to N63.27 per scm”.
But in response to MAN’s allegations, Oando’s spokesperson, Mr. Niyi Olowola, told THISDAY yesterday that Gaslink was still negotiating with its customers on the issue and was positive that they would come to a common ground. “Gaslink’s management understands the challenges our customers face and is positive that the issues on ground will be resolved in a matter of days. Already, another meeting is scheduled for tomorrow (today) towards achieving an amicable resolution,” Olowola said. “Only nine of our over 80 customers are yet to make any form of payment for our services, which indicates a large degree of cooperation.”The gas price hike has resulted in a major rift between Gaslink and MAN.MAN accused Gaslink of disregarding the Gas Sales and Purchase Agreement (GSPA) signed between the gas company and members of MAN.Explaining the GSPA, the Director-General of MAN, Mr. Jide Mike, said it was stated explicitly in article 10.2 of the agreement that the price of gas would be benchmarked against the price of LPFO as determined and published by the Pipeline Product and Marketing Company (PPMC).
“Logically therefore, the price of gas can and will only change if the price of LPFO changes. To date, the price of LPFO has remained N25.40 per mscf and we have proof that the PPMC has not published or declared any increase in the price of LPFO,”

CBN sells $190m at inter-bank window of foreign exchange market
A report of the transactions in the Wholesale Dutch Auction (WDAS) for the week ended September 5, said that the CBN intervention in the window increased by 137.50 percent during the week. The report, which was made available in Lagos Wednesday, said that the apex bank offered $130 million in the WDAS window last week as against $160 million offered in the preceding week. “The aggregate demand for foreign exchange by the authorised dealers decreased from $202.87 million to $98.50 million. The CBN did not sell foreign exchange at the WDAS window during the week under review,” it reported. The CBN said that the average number of banks that participated at last week’s auction decreased to 15 from 17 in the previous week. It said that the average number of successful banks also decreased from 16 to 10. “The average exchange rate of the naira remained at N117.73 per dollar. The weighted average exchange rate appreciated by 0.01 per cent to N117.73 per dollar. “At the Bureau-De-Change (BDC) segment of the market, the naira traded at an average exchange rate of N119.00 per dollar as in the preceding week.”Hence, the premium between the official and BDC rates remained at 1.1 per cent,” the report said.

Flour Mills increases dividend by 11%
Flour Mills of Nigeria plc has increased its dividend payout to investors by 11 percent in its 2008 financial year end. Speaking at the company’s pre-annual general meeting in Lagos, Emmanuel Ukpabi, managing director of the company disclosed that the company has proposed a N1.00 dividend in 2008 compared to the 90 Kobo dividend it gave in 2007. This indicates an increase of 11 percent in the review period.”The amount proposed translates to a dividend of 100 kobo per Ordinary Share of 50 Kobo each compared to 90 Kobo in year 2007. The increase reflects the Board’s confidence in our business growth” Ukpabi said. Cumulative amounts to N1.553 billion in year 2008 compared to N1.397 billion in year 2007.The company’s turnover increased to N104.051 billion in 2008 from N91.1 billion in 2007, showing an increase of 14 percent in the review period.However, Profit before Tax (PBT) declined slightly from N7.3 billion in 2007 to N7.1 billion in 2008 indicating a decline of 3.0 percent.Similarly, profit after tax (PAT) dropped from N5.1 billion in 2007 to N4.3 billion in 2008 representing a drop of 19 percent in the review period. The company attributed drop in profits to the effect of last year’s tax adjustments.

FG to Raise $500m Bond for Infrastructure
The  Federal Executive Council (FEC) yesterday gave the Federal Govern-ment approval to issue a Naira denominated bond  worth $500 million, for a tenure of 10 years in the International CapitalMarket(ICM).President Umaru Musa Yar’Adua had before commencement of the FEC meeting, sworn-in the new Secretary to Government of the Federation, Ahmed  Yayale.Briefing State House Corres-pondents yesterday,  Minister of Information and Communication, John Odey, said Nigeria had received several proposals from international banks, requesting that the country should raise funds in the ICM through issuance of bonds.He said:  “an ICM outing would be a means of raising substantial capital needed to finance infrastructure, in line with the seven point agenda and NEEDS II, the right environment for private sector led growth.”Also, a sovereign bond issuance will serve as benchmark for subsequent issues by the Federal Government, sub-national governments and, more importantly, the private sector; and; again, it will complement significantly, efforts being made to project Nigeria internationally as one of the strong emerging economies in the world.

FG creates ministry of Niger Delta, restructures others
The Federal Government yesterday created a separate ministry of Niger Delta affairs, the first step in a comprehensive review and restructuring of the executive arm. The creation of the new Niger Delta ministry and de-merging of some mega ministries bring to 42 the total number of ministries from 28. Also, approval has been given for a $500 million sovereign bond to be sourced from International Capital Market (ICM) for tenure of 10 years to boost the development of infrastructure to boost the nation’s economy. Briefing State House correspondents after the Federal Executive Council (FEC) meeting presided over by President Umaru Yar’Adua, John Odey, minister of information and communications accompanied by Ibrahim Nakande, his minister of state, said the purpose of the memorandum to FEC is to brief council on the proposal to issue the bond in the ICM. Odey said the “council after deliberations, and noting the various positive impact the proposal will have on the economy, approved that Federal Government issues a naira denominated bond in the equivalent of $500 million for a tenure of 10 years in the ICM.”

Equity Assurance looks to 15k dividend in 2010
Equity Assurance plc plans to pay a dividend of 15 kobo per share to investors who buy into the ongoing public offer at the end of the financial year ended December 31, 2010. According to the offer prospectus, the company in its offer forecast statistics indicated that it would pay investors a 0.7 kobo, 10 kobo and 15 kobo dividends for years 2008, 2009 and 2010 respectively. However, dividend per share is based on 9,978,670,860 ordinary shares for 2008, 2009 and 2010 respectively.The directors also envisaged gross earnings of the company to rise from N2.495 billion in 2008 to N5.250 billion in 2010 while profit after tax is estimated at N3.068 billion for 2010.Similarly, profit after tax has been projected to increase from N1.278 billion in 2008 to N2.700 billion in 2010 showing an increase of 111.26 percent in the forecast period. It would be recalled that the company is in the market to raise the sum of N7 billion by way of hybrid offer. It is presently offering for subscription 1.5 billion ordinary shares of 50 Kobo each at N3.50 per share and rights issue of 707 million units of 50 kobo each at N3.00 per share.