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Nigeria’s Flour Mills’ shares hits record low as investor sentiment shifts

FMN retained ₦20 as profit from every thousand naira generated as revenue, relative to ₦31 one year back

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Nigeria’s Flour Mills’ shares hits record low as investor sentiment shifts

Shares of Flour Mill of Nigeria Plc (FMN) tumbled to its lowest level, this week at ₦13.75 since July 2009, depressed by sell pressure as investor apathy in the stock rose.

FMN’s bearish streak began in March this year, and shed 0.36 per cent after Monday’s trading, down 68 per cent since the year-to-date.

The miller underperforms the benchmark index and consumer goods index that have returned negative 3.9 per cent and 16.2 per cent respectively so far in the current year.

Investors’ apathy toward the stock is driven by weak market sentiments and unimpressive earnings scorecards.

General sentiment towards the equity market is weak as investors are yet to see economic-stimulating policies that would resuscitate the bourse.

Analysts maintained that the slow growth of the wider economy and absence of key reforms that center on unifying the multiple exchange rate system, wanes investors’ confidence towards the equity market.

A snapshot of its earnings figure revealed that the food products maker’s top-line shed 6 per cent to ₦400.6 billion in the first nine months of 2018, relative to ₦427.5 billion realized in the previous corresponding period.

This, in addition to elevated operational expenses, adversely affected bottom-line as net income dipped nearly by half to ₦7.9 billion.

Consequently, profit margin of the agro-allied player slowed to 1.97 per cent in the review period, 1.12 percentage points lower than 3.08 per cent a year before.

This implies that FMN retained ₦20 as profit from every thousand naira generated as revenue, relative to ₦31 one year back.

However, given the Nigerian presidency’s directive towards clearing the country’s premier port hub, Apapa, the company might possibly see improvement in top and bottom-line in 2019.

FMN announced plans three months ago to transfer existing assets in Golden Penny Fertilizer to its sole agro-allied segment, Golden Fertilizer Company Limited to boost efficiency and market expansion.

FMN trades at a price-to-book ratio of 0.39 x, compared with Dangote flour (2.6x) and Northern Nigerian Flour Mill (0.76x), implying that the stock is currently undervalued.

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South Africa’s Foschini to halt Kenya, Ghana operations

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations

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South Africa's Foschini to halt Kenya, Ghana operations
(File photo)

South African fashion retailer, the Foschini Group is considering shutting down its Kenya and Ghana businesses.

The firm’s Chief Executive Officer, Anthony Thunstrom, affirms that at least, six stores will be affected in both countries.

South African retailers have recorded poor performance in the last year, due to slow economic growth and currency devaluations that had hit sales.

In July, department store chain, Woolworths pulled out from West Africa for a second time.

The Foschini Group will review economic growth, legislature and lease negotiations in Kenya and Ghana before making its decision.

Come September, in its home market, Thunstrom says The Foschini Group will launch a smaller format Sportscene store that will enjoy entertainment features such as a basketball court and a DJ booth, in an effort to lure millennials into its stores and away from online players such as Naspers’ majority-owned Superbalist.

The store will be launched in September in Johannesburg’s upscale Sandton shopping and financial district.

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Total Mozambique gas project will go on despite insurgency

Total will also acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa

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Energy major Total on Friday said it remained committed to a Mozambique liquefied natural gas project on the country’s northern coast despite deadly Islamist insurgent attacks.

Total will become the operator of the $25 billion Rovuma LNG Project whose construction began on August 5 in the Afungi Peninsula.

The company is also set to acquire US energy giant Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa, strengthening Total’s position in Africa.

But the area where the project is located has been targeted by jihadists since October 2017, claiming more than 300 lives.

Attackers in February launched an assault on a convoy of vehicles from an Anadarko contractor, killing one worker and injuring others. 

This led to the suspension of operations for a few months, with activities only resuming after the government announced the deployment of armed forces.

Several hundred suspected attackers have been arrested, according to authorities, but sporadic assaults continue.

On Friday Total’s CEO Patrick Pouyanne reaffirmed Total’s commitment to the LNG project saying it “is a unique asset which perfectly fits our strategy and our skills.

“Please be assured of the commitment of Total to bring the best of our human, technical and financial capacities to further strengthen the project execution … in the interests of all those involved, including the government and people of Mozambique,” he said in a statement.

The project is expected to be transformational for Mozambique, creating an estimated 5,000 direct jobs and 45,000 indirect jobs.

The country’s gas deposits are estimated at 5,000 billion cubic metres and would make Mozambique a major exporter of liquefied natural gas.

The use of natural gas is on the rise globally as countries struggle to meet energy demands and shift away from using coal.

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Kenya plans to tax OTT services like Youtube, Netflix

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers

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Kenya plans to tax OTT services like Youtube, Netflix

Kenya’s Information Communication and Technology (ICT) ministry is working on completing a new tax scheme.

This framework, reports say, will be used to tax foreign online streaming media services such as YouTube and Netflix.

The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.

OTT services include all applications that offer voice, video and messaging services over the internet.

Communications Authority Director-General, Francis Wangusi says online content providers exploit the Kenyan industry. Yet, neither the government nor artistes benefit from them.

According to Wangusi, “many countries have policies that guide these services and that is where we are heading as a country”.

He adds that technologies that will facilitate taxation of OTT services are available.

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