MARKET STABILITY: REGULATORS ADVISED ON PRONOUNCEMENTS
Regulators in the Nigerian financial system have been cautioned against actions and pronouncements that will further heighten instability in the nation's capital market.
This advice was given by shareholders at the first Annual General Meeting of Honeywell Flour Mills Plc.
According to them, various actions taken by the financial regulators in recent weeks had caused panic sell-off in the market.
This, they said, had accounted for the downward trend of activities on the Nigerian Stock Exchange.
The National President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said that investors were worried by the instability recorded in the market, adding that it was important that regulators, including the Central Bank of Nigeria and the Securities and Exchange Commission worked toward reversing this trend.
The Chairman, Honeywell Plc, Mr. Oba Otudeko, advised regulators to carry out activities geared towards building confidence, adding that the capital market thrived on confidence and good corporate governance.
He said that issues and policies that would promote confidence should be instituted so that the capital market would return to stability.
Speaking on the performance of the company for the year ended March 31, 2010, Otudeko noted that the company tried to perform well despite the infrastructural gap, which had affected a lot of businesses in the country.
According to him, 'Manufacturing activities decreased in the period under review, recording a decline in growth rate from 7.03 per cent in 2009, to 6.43 per cent in 2010. This development is traceable to poor electricity power supply, high cost of funds, high cost of raw materials and other inputs, as well as lack of access to credit from banks and low capacity utilisation.
'In spite of the relatively difficult economic climate highlighted above, the company posted a good result for the financial year, with turnover increasing by 17 per cent from N28.58bn in 2009, to N33.53bn in the year under review.'
He noted that profit after tax also rose by 442 per cent from N217m in 2009 to close the financial year at N1.176bn.
He said the shareholders' funds as well as total assets of the company, grew by 150 per cent and 28 per cent respectively, to close at N13.51bn and 30.01bn in the review period.
He said, 'Accordingly, the board has recommended a total dividend of N872m, representing 11 kobo per share to shareholders, and this amount will be paid as from September 21, 2010.