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Nigerian Banks Loss N372B in Equities

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Banking stocks suffered the most among 25 top losers in the equities’ market as share price decline left investors with a net capital loss of N372 billion.

There were 10 banking stocks among the top 25 that lost 30 per cent and above in the past eight months. Some of the top losers recorded as much as 60.1 per cent in equities price reduction.

Conversely, only one banking stock made the few top gainers’ within the period. Altogether, there are 15 banking stocks quoted on the Nigerian stock market.

Three other banking stocks recorded various gains, while a bank dropped by 12.3 per cent.

Investors in banking stocks have suffered the highest losses with nearly three-quarters of quoted banking stocks running with double-digit losses. Losses in the banking sector generally significantly outweighed the overall market’s average loss, according to data review by The Nation.

The benchmark indices for the Nigerian stock market indicated eight-month average decline of 3.64 per cent, equivalent to a loss of N372 billion. Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) closed August at N9.479 trillion as against its year’s opening value of N9.851 trillion. The All Share Index (ASI), which tracks prices at the Exchange, dropped to 27,599.03 points by the month-end as against its year’s opening index of 28,642.25 points.

Banking stocks were deep in the red with the troubled Skye Bank leading the top 25 losers with year-to-date loss of 60.13 per cent. The Central Bank of Nigeria (CBN) had sacked the board and management of Skye Bank over corporate governance issues. Diamond Bank followed with a loss of 54.35 per cent. Other top losers in the banking sector included Ecobank Transnational Incorporate, -31.3 per cent; Fidelity Bank, -40.67 per cent; Sterling Bank, -49.18 per cent; Union Bank of Nigeria, -39.13 per cent; Unity Bank, -30.36 per cent; Wema Bank, -34.0 per cent; FBN Holdings, -40.53 per cent and FCMB Group, which market value had dropped by 39.64 per cent. Stanbic IBTC Holdings meanwhile dropped by 12.3 per cent within the period.

While consolidation, steep price declines and emergence of highly capitalised non-bank stocks such as Dangote Cement had reduced the hitherto overwhelming dominance of the market by banking stocks, banking stocks still account for some 25 per cent of the total market value of the Nigerian equities market.

Head, financial advisory group, GTI Capital Group, Mr. Kehinde Hassan, said the negative performance of the banking sector was weighing heavily on the overall market performance.

He noted that the unstable policy environment and the knee-jerk approach of the Central Bank of Nigeria (CBN) to regulatory decisions have compounded the tough operating environment for banks, many of which had warned of lower earnings due to the headwinds.

Only Guaranty Trust Bank (GTB) ranked within the top gainers’ list with 8-month gain of 45.76 per cent. United Bank for Africa (UBA) meanwhile posted a heartwarming return of 28.7 per cent. Access Bank followed with 14 per cent while Zenith Bank, against all expectations, trailed with a modest gain of 6.05 per cent.

Other top losers for the period included Livestock Feeds, -33.1 per cent; UACN Property Development Company, -42.5 per cent; Honeywell Flour Mills, -35.12 per cent; Vitafoam Nigeria, -43.99 per cent; AIICO, -30.77 per cent; Union Homes and Savings, -39.24; Fidson Healthcare, -32 per cent; GlaxoSmithKline Consumer Nigeria, -45.88 per cent; Berger Paints, -31.1 per cent; Cement Company of Northern Nigeria, -35.8 per cent; Lafarge Africa, -40.1 per cent; Portland Paints and Products Nigeria, -53.2 per cent; Forte Oil, -47 per cent; Tourist Company of Nigeria, -43.1 per cent and Caverton Offshore Support Group, which lost 40.9 per cent.

Nigerian equities have writhed under sustained losses in the past 32 months. Aggregate market value of all quoted equities on the NSE closed 2015 at N9.851 trillion as against its opening value of N11.478 trillion for the year, representing a loss of N1.627 trillion. The ASI indicated a negative full-year average return of -17.36 per cent. The ASI closed 2015 at 28,642.25 points as against its opening index of 34,657.15 points.

The losses in 2015 worsened the downtrend that had in 2014 marked out Nigerian equities among the worst-performing stocks globally with average full-year decline of 16.14 per cent. Aggregate market value of all quoted equities had closed 2014 at N11.478 trillion as against its opening value of N13.226 trillion for the year, indicating a loss of N1.75 trillion during the year.

Altogether, investors have lost more than N3.75 trillion in the past 32 months as the stock market groaned under political tension, steep decline in crude oil prices, foreign exchange crisis, uncertain policies and other domestic and global macroeconomic concerns.

The second half of 2016 has however seen considerable share price recovery compared with the steep losses in the first half. In the first quarter alone, Nigerian equities had recorded a net loss of N1.15 trillion.

Notwithstanding the negative overall market situation, many stocks have posted substantial returns so far this year. Dangote Flour Mills, which saw the reemergence of Aliko Dangote’s Dangote Industries Limited as the core investor, recorded the highest gain of 240.7 per cent. E-Tranzact followed with a gain of 97.4 per cent. United Capital returned 74.8 per cent while Total Nigeria posted eight-month return of 63.3 per cent. Other top gainers included Presco, 37.2 per cent; AG Leventis, 43.6 per cent; Union Dicon Salt, 39.3 per cent; Neimeth International Pharmaceutical, 32.6 per cent; DN Meyer, 30 per cent; Seplat Petroleum Development Company, 49.4 per cent; Eterna, 33.7 per cent and RAK Unity, a second-tier stock that posted a year-to-date return of 61.3 per cent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Japaul Gold and Ventures Plc Fails to File Q1 2021 Financial Statements

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Following the failure to file the 2020 Audited Financial Statements, Japaul Gold & Ventures Plc once again failed to file the unaudited financial statements for the first quarter of 2021.

According to the company formerly known as Japaul Oil and Maritime Services Plc, the first quarter delay was as a result of the pending 2020 audited financial statements which has not been finalised.

Therefore, the company could not file the 2021 first-quarter results due to the inconclusiveness of 2020 Audited Financial Statements.

Japaul Gold & Ventures apologises for the delay and requests the public/stakeholders/prospective investors to bear with the company.

The company, however, promised it is working hard to ensure that both 2020 Audited and 2021 Q1 Unaudited Financial Statements are filed as soon as possible.

Japaul Oil and Maritime Services Plc changed its name to Japaul Gold & Ventures Plc after years of struggle in the oil and maritime sector and immediately announced it was investing in a Chinese-owned H&H Mines Limited and shift its attention to mining.

The announcement bolstered the company’s shares by over 100 percent before a series of reports analysing the likely challenges the company will face in closing the deal given the pandemic and the fact that it needs to raise the necessary funds for the deal from the debt market.

Japaul’s share plunged shortly after. Up until now, nothing has been heard of the said deal rather the company continues to struggle with audited financial statements of 2020 and even the first quarter of 2021.

 

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Banking Sector

Wema Bank Unveils Hackaholics 2.0 Bootcamp Winners, Gives Out Over N8M Seed Fund

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Wema Bank’s Hackaholics 2.0, an acceleration aimed at helping startups scale and gain entrance into the market, came to an exciting end as the finalists were unveiled on Wednesday, May 5, 2021, at the Bank’s corporate head office in Marina, Lagos.

Themed, “Connecting Worlds” the Acceleration Program was a two-day virtual pitch which ran from October 30 – 31, 2020, for 20 participants across five industry pillars – Fintech, Agritech, Edutech, Gaming, and Healthtech, who qualified from a pool of over 100 entries received.

The Bank presented four startups comprising two people each with N2,187,500.00 startup fund. The winners emerged across each industry after a four-week Bootcamp under the supervision of a best-in-class acceleration curriculum delivered by seasoned faculty and tech specialists from GreenHouse Capital, official partners of the event.

The Managing Director/CEO, Wema Bank, Ademola Adebise congratulated the winners and expressed satisfaction with the quality of competition and the entire process.

“We are happy to see the winners emerge and are positive that you guys will be the unicorns of tech solutions in the next couple of years,” he said.

“For us at Wema Bank, we will continue to support innovations and innovative ideas, support our youths, and support our women to thrive. We believe that is the way to go and significantly grow and support the economy,” Adebise said.

The winning start-ups are:

Fintech Category: Oladayo Awotukunbo of Plumpter, a Fintech brand that created a marketplace for secure payments to foreign parties and quick banking.

Gaming/Betting Category: Ernest Akinlola and Obayemi Okubajo of My Lotto Hub, a digital startup pioneering the aggregation of lottery operators and enabling lottery punters to manage all their operations in a single platform

Agritech Category: Aderinola Amole and Olamide Oyinlola of FarmSquare, a brand that focuses on using the e-commerce model to simplify the demand and supply of Agricultural inputs in Nigeria.

Healthtech Category: Uche Udekwe and Joy Chioma of Natal Cares, a startup with a product that optimizes the healthcare value chain to reduce the high mortality rate for pregnant women and children.

Speaking at the event, Chief Financial Officer, Wema Bank, Tunde Mabawonku, reinforced the internal and external growth integration stance of the bank saying: “We realized very early that financial service delivery has moved beyond bricks and mortar physical interactions, hence, at Wema Bank we repositioned internally, invested strategically and heavily in technology to drive Digital Optimization of our services”.

“Second, we realized we can’t innovate all from within, we need to drive innovation from outside. We then created “Hackaholics” the Wema Bank Hackathon. The idea is to bring fresh minds, fresh ideas, fresh insights, into solving day-to-day societal problems leveraging technology. We are also working with third-party resource providers we can invest in to grow the solutions for societal impact”. Mabawonku added.

Chief Digital Officer, Wema Bank, Segun Adeniyi emphasized the importance of the Bank’s sustainability footprints. “We aim this initiative at deepening the impact of innovation in the ecosystem and create an opportunity to drive that ecosystem. There is a plethora of start-ups and innovators out there who don’t have the right environment to upscale those ideas into commercial value”.

“What we have done is giving some seed to them in funding, and more importantly, we have given them advisory. We have helped them to look at the ideas they have, flesh them into commercial value, help them articulate the problem, identify unique areas where and how they can solve those problems, and identify their target market.”

The winning startups all expressed gratitude to Wema Bank for the seed fund and commended the bank for the initiative. They said the Hackathon Bootcamp has broadened their horizon. They expressed that the seed funding from Wema Bank will help to upscale their businesses to the desired place.

“For us at Wema Bank, this is not just CSR. It is creative self-disruption. We are attuned to what is going on in the ecosystem, we are keen to be part of it, we are enthusiastic about sharing our own experiences with the start-ups. It is part of why we stay vibrant and relevant as an organization,” Adeniyi concludes.

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Banking Sector

Heritage Bank Partners Road Transport Workers

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Heritage Bank in partnership with the Road Transport Employee’s Association of Nigeria (RTEAN) has launched the Travelers’ Accident Insurance Scheme (TAIS) to assist road accident victims across the country.

The scheme which was launched on Friday aims to address deaths associated with the inability of travelers involved in accidents to offset hospital bills.

The Regional Executive, Abuja, and North, Heritage Bank Plc, George Okoh-Oboh, while speaking at the launch of the scheme in Abuja, commended the thoughtfulness of the association in coming up with such a program to save the lives of accident victims.

He stated that the partnership would help address the road safety crisis due to the tragic loss from a road crash death or severe injury which was compounded by the harm to families, social networks, and national economies.

According to him, the majority of victims are part of the working-age population (between 15 and 64 years old). In fact, road crashes have become the #1 killer of the young worldwide.

He pledged the continued support of the bank in ensuring the success of the scheme.

Okoh-Oboh said, “At Heritage Bank, we believe in this project and we are ready to support it as it seeks to address accidents on the road.

“This project will save lives of many Nigerians, so we are not just here to see what comes in but we are here to add value and ensure that it succeeds.”

The National President of RTEAN, Musa Muhammed, in his remarks said the scheme aims at promoting the welfare of passengers while ensuring security for passengers’ property.

He explained that the scheme would provide support to passengers who may be involved in accidents at the course of their journeys.

“This scheme covers all Nigerians involved in accidents that require medical attention while on a road trip. This is part of an effort to assist and improve the Nigerians transport system,” he added.

According to him, the scheme will cover only parks owned and operated by members of the Road Transport Workers Association.

He further stressed the need for the government to deepen investments in road infrastructure while ensuring security along the major road.

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