NSE top 25 CEOs boost market capitalisation by N301bn in 2015

Despite the bearish capital market in 2015, partly caused by the crash in crude oil prices and a change of government in Nigeria, 25 chief executive officers of the companies listed on the NSE defied the odds by adding N301 billion to their companies’ market capitalisation.

They also posted N59 billion profit after tax(PAT) as at Q3 2015, the analysis of the NSE market activities for the selection of the NSE 25 Top CEOs for 2015 by BusinessDay Research and Intelligence Unit(BRIU) has shown.

But for these companies, the Nigerian Stock Exchange’s All Share Index would have closed lower than the negative 17 percent it posted last year, which led to a whopping N1.63 trillion loss in investments.

The sectoral breakdown of the list shows that two companies made the list from the agric sub sector, one from aviation, and three from the banking sector.  We also have three companies from the building materials sector, two from consumer goods, and a firm from the food and beverages sub sector. Further sectoral analysis shows that three firms from the industrial sector, five insurance companies, a courier company, three oil and gas giants and a pharmaceutical company complete the list of the 2015 Top CEOs on the NSE.

The parameters adopted by BRIU are share price appreciation and a sustainable profit after tax (PAT) as at Q3 2015.

We also observed that the 2015 Q3 PAT of the three banks on the list and a few other companies declined when compared with the results they posted same period in 2014.

“Banks made so much profit from forex operations in 2014 and that window closed in 2015 due to the CBN forex policy” said Kemi Akinde, an analyst with Meristem Securities, justifying the trend we observed in the financials of the companies that made the list. 

Although the share prices of Union Homes Savings & Loans, Golden Guinea Breweries and Roads Nigeria plc closed higher last year by 894 percent, 5.43 percent and 4.93 percent respectively, they were excluded from the list on account of the non-availability of any of their quarterly financials in 2015. As a result, our team was not able to justify the attraction investors saw in them.

In an email response to our enquiries, the NSE Contact Centre said “Share price of companies are determined by several factors which include market hear-say, fundamentals, future prospects, released financials etc. Therefore, one or possibly a combination of the above factors could have accounted for the positive close of the share prices of the above companies.”

It further stated that Union Homes was about to be acquired by Aso Savings, while Golden Guinea Breweries is undergoing restructuring and is yet to commence operations as these might have prevented the firms from submitting their results. No reason was provided for the non-availability of the quarterly financials of Roads Nigeria Plc.

Introduced in 2013, the BusinessDay’s NSE Top 25 CEOs seeks to identify the exceptional CEOs of quoted companies who added value to their organisation in a particular financial year.

The value added is measured in terms of share price appreciation and sustainable PAT in their latest quarterly results. The annual awards have become the capital market bellwether, indicating companies whose CEOs have consistently improved the fortunes of investors and shareholders.

Ranked by share price appreciation, Unity Bank, Beta Glass, Law Union and Rock, Forte Oil and NPF Microfinance Bank appreciated the most by 124 percent, 92.4 percent, 46 percent, 44.8 percent and 37.5 percent respectively.

And by value added to market capitalisation, Forte Oil Plc’s CEO outperformed  others, as he added N133 billion to his company’s market capitalisation in 2015. Also, Forte’s Q3 PAT 2015 rose 9 percent to N4.28 billion, compared with N3.92 billion in Q3 2014. Lafarge Wapco, N74billion; Unilever, N28billion; Beta Glass, N13 billion and 7-Up Bottling Company, N10.6 billion are the top five by value added.

Wema Bank Plc made the list for the first time this year. Its share price appreciated by 4.17 percent, just as the company made N1.3 billion as PAT in Q3 2015.  The bank recently obtained the final approval from the Central Bank of Nigeria (CBN) to convert its license from a regional bank to a national bank.

TELIAT SULE