Unit holders of CSL Stockbrokers Limited Legacy Fund was denied dividend despite the Fund Manager declaringÂ N143.7 million Profit After Tax (PAT) for the financial year ended December 31, 2008.
The Legacy Fundâ€™s PAT for the year went up by 112.3 per cent from N67.683 million in the same period 2007 to N143.658 million in 2008.
According to the Annual Report made available to Vanguard, CSL recorded a gross income of N178.754 million in 2008, down by 24.4 per cent from N236.350 million in 2007.
The operating expenses of the firm dropped by 66.2 per cent from N97.516 million in 2007 to N33.002 million. The operating profit rose to N145.752 million in 2008 from N138.834 million in 2007.
No dividend was distributed to unit holders during the period under review as against N21.182 million distributed the previous year.
The Fund recorded a retained profit of N140.488 million as against N36.981 million in the previous year. Earnings per unit was18.4 kobo in 2008 as against 6.6 kobo in 2007.
The Fund Manager in its statement said â€œThe second financial year for the Legacy Fund could be categorized as cautious investing as the capital market during the period under review was a tale of two halves. The momentum from June 2007 continued for the remaining part of the year. The year 2008 started with a bang as the index rose to new highs closing at 66371.20 on March 05,2008. Then came a number of policy announcements by the Central Bank of Nigeria (CBN) that not only slowed the growth but put the market into a tail spin.â€
According to the Fund Manager, â€œ The unprecedented bullish run came to a halt as rumours circulated that government via CBN was going to curb the margin facilities banks were providing to the brokerage houses. The liquidity squeez was further pronounced by the announcement by CBN to harmonize the banks financial year end. Funds were sucked out of the capital marekt as banks went on deposit gathering drive as rates went, through the roof. By th time CBN reversed the decision the market was already headed south as investors (notably foreign investors) bailed out in droves.â€
The report noted that for the 12 month period ended June 30, 2008 the Legacy Fund posted a total return of 6.7 9 per cent net of expenses, adding that since inception of the Fund, it has returned a total of 88.42 per cent and currently trades at N1.79.
On the outlook of the Fund, the Fund Manager stated that it would continue to identify growth opportunities while safeguarding the Fundâ€™s assets.