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Afribank Set to Hit the Market with Share Offer

Intending stock investors who have missed some of the recent share offers in the Nigerian stock market may yet get enough opportunities to do so. This is because the primary market is certain to remain intensely active in the weeks and possibly months to come. Many more offers are lined up, going by emerging information, providing investors plenty of investment options to consider.

The activity tempo of the market in 2007 has remained impressive, with one or more new offers each passing month of the year so far. Some twenty or so offers - subscription, rights issues, private placements and IPOs - were already approved by the Securities and Exchange Commission by the end of the third quarter. Even as this piece is written, offers by Japaul Oil and Maritme Services, Fidelity Bank and First City Monument Bank are running. Interestingly, the market has shown extraordinary capacity to absorb the offers, a point that was sharply made with the First Bank N100 billion offer which received a 500% subscription. First Bank has just been reported to be seeking SEC's approval to absorb additional N150 billion, over what it initially sought.

So, if you're looking for where to invest in primary issues, first, there are the current offers to consider. In addition, the following would seem to be in the pipeline, going by company announcements, applications to SEC or other observable preparatory action:

• AIICO Insurance
  AIICO has already held an extra-ordinary general meeting to secure shareholders' approval to raise up to N10 billion additional capital, using any or a combination of options: convertible loans, equity, debt. Beyond the legalese of the resolution crafting, what it all says is that this insurance company should be expected in the market anytime soon.
• Mutual Benefits Assurance
  At an extra-ordinary general meeting scheduled for today, 18th October, 2007, Mutal Benefits will be seeking its shareholders' sanction for additional capital injection of N10 billion. The board needs approval to raise the funds through issue of redeemable convertible bonds, loans, equity, debt, a hybrid, or by way of offer for subscription.
• Afribank
  The much-expected Afribank offer to raise N100 billion is yet to hit the market, but that's just a matter of time. Though it was expected to hit the market before now, that would appear to have been delayed.
  
• Bank PHB
  The bank is set to get better on its capital base with a share offer to raise N85 billion. It has just secured the approval of its shareholders at its Annual General Meeting held yesterday, 17th October, 2007. The capital will be raised through the issue of 5 billion ordinary shares at N17 per share. The bank is believed to have submitted a request for the approval of the offer by the Securities and Exchange Commission.

Indications are that even more insurance companies will join in the race to further fortify their capital base. Besides, each insurer will like to level up on capital to even out the competitive advantage. More banks are likely to want to do so too. Primary market share offers, especially from the financial services sector, are therefore likely to remain with us for a while.

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