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Wednesday, November 30, 2022

SELL: Cardinal Stone Partners Offloads 25.42 million NGX Shares

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In what would surely be interpreted as a vote of no confidence on the Nigerian Exchange Group (NGX) and its management, Cardinal Stone Partners has just sold 25,423,999 shares of the NGX, according to a recent filing.

The shares were sold on 22 September, 2022 at an average price of N18 per share and netted an estimated N457.6 million for Cardinal Stone Partners (an investment management firm), according to MoneyCentral calculations.

The share sale premium was about 11.5%, as the listing price of NGX shares in October 2021 on the Main Board of Nigerian Exchange Limited (NGX) was N16.15 per share.

The Nigeria Exchange Group (NGX) which has been looking for a way to buy growth amid lacklustre earnings recently took on a term loan which increased its borrowings to the tune of N14.52 billion to help finance an investment in securities clearing firm CSCS in which it seeks to increase its equity stake.

MoneyCentral exclusively reported earlier that the NGX had made a N14.1 billion deposit to that effect.

Central Securities Clearing System Plc or (CSCS) is Nigeria’s Central Securities Depository (CSD) licensed to carry on the depository, clearing and settlement of all transactions in the Nigerian Capital Market.

In its June 2022 financial statement, NGX said the jump in borrowings from zero in 2021 to N14.52 billion in June 2022: “represent loan to finance strategic investment.”

The NGX reported after-tax profit of N820.16 million in the 6months period to June 2022. The firm came under fire recently for alleged lax corporate governance and poor shareholder value creation, for which it was forced to respond.

This is the fourth major insider sale of NGX shares in 2022, including 3.407 million share sales by VFD Group Plc in February at N25.5 per share and Pilot Securities Limited which sold 6 million shares at N20.94 per share in March.

Pivot Capital Limited, a Company related to Mr. Dare Adejumo, a member of the Statutory Audit Committee of the Nigerian Exchange Group Plc offloaded 2,935,961 shares of the NGX in May, 2022.

The NGX reported revenues of N6.79 billion and profit of N2.24 billion in 2021. It also reported an operating loss of N36.59 million in the first quarter of 2022.

The NGX closed trading at N19 per share on Tuesday for a market capitalization of N33.39 billion.

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