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Market Loses N59bn as CBN Restricts Forex Sales

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  • Market Loses N59bn as CBN Restricts Forex Sales

The stock market (equities) dipped by N59bn on Thursday following the Central Bank of Nigeria’s directive to Deposit Money Banks (excluding First Bank of Nigeria Limited) to restrict the sale of foreign exchange to Bureau De Change operators.

Generally, the banking sector made the biggest loss.

ETranzact Internal Plc, BOC Gases Plc, Forte Oil Plc, Pharma-Deko Plc and Guaranty Trust Bank Plc topped the losers’ chart at the close of trading on the floor of the Nigerian Stock Exchange on Thursday.

The NSE market capitalisation dropped to N9.567tn from N9.626tn, while the NSE All-Share Index closed at 27,854.78 basis points from 28,027.23 basis points recorded on Wednesday.

A total of 380.754 million shares worth N1.833bn exchanged hands in 2,954 deals.

ETranzact share price plunged to N5.14 from N5.41, shedding N0.27 (4.99 per cent while the shares of BOC Gases lost N0.18 (4.86 per cent) to close at N3.52 from N3.70.

Forte Oil share price also depreciated by N7.69 (4.82 per cent) to close at N152 from N159.69, while Pharma-Deko shares recorded a loss of N0.09 (4.81 per cent) to close at N1.78 from N1.87.

GTBank shares also plunged by N1.14 (4.75 per cent) to close at N22.86 from N24.

Overall, the Nigerian equities closed lower with banking stocks leading the decline.

The financial services sector snapped a three-day positive run, down by 2.13 per cent. GTBank dropped by 4.75 per cent, Wema Bank Plc by 4.62 per cent and StanbicIBTC by 3.15 per cent.

The oil and gas sector snapped a two-day rally following market reaction to the Q3 2016 earnings of Forte Oil coupled with 0.77 per cent loss in Oando Plc.

While the industrial goods sector dipped further into the red amid continued decline in Lafarge Africa Plc (2.58 per cent loss), the consumers goods sector proved resilient as it advanced following the 2.85 per cent gain in Dangote Sugar Refinery Plc, 0.82 per cent gain in Nigerian Breweries Plc and 0.78 per cent gain in Honeywell Flour Mill Plc.

Market breadth remained negative with 12 advances and 31 declines.

“We expect the NSE ASI to further drop points at week close following the pressure across board, particularly banking stocks even as the negative spread in market breadth widened,” Vetiva Capital Management Limited analysts said.

Global markets traded mostly lower after minutes from the United States Federal Reserve’s September meeting raised expectations of a December interest rate hike and as weak China trade data (exports and imports slipped by 10 per cent and two per cent respectively) weighed on investor sentiment.

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.

Banking Sector

Ecobank Partners NiDCOM to Mobilise Nigerians Abroad for National Development

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In a bid to fulfill it’s objectives and mandate, the Pan African Bank has promised to support Nigerians living and working abroad through it’s partnership with NiDCOM.

The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has stated that the bank is privileged to work closely with the Nigerians in Diaspora Commission, (NiDCOM) and will continue to pursue one of its key mandates of helping to enhance the economic development and integration of Africa through its support to Nigerians living and working abroad.

Speaking at the maiden edition of the Diaspora Quarterly Lecture Series with Ecobank as the sole banking partner which took place on Saturday, 8th May 2021, he noted that Ecobank remains a critical bridge for Nigerians abroad, as it has made huge investments in the necessary platforms to enable them connect with home seamlessly. The event held online and had over 2000 participants from across all the continents in attendance.

“Nigerians in the diaspora play a major role in nation building, their contribution goes a long way to catalyse economic development. For us at Ecobank, we are a pan-African institution positioned to foster the economic growth and integration of our continent, so we are particularly pleased to work closely with the Nigerians in Diaspora Commission (NiDCOM), ably led by the Chairman/CEO, Hon Abike Dabiri-Erewa”.

“We are committed to ensuring that every Nigerian living abroad is able to remit home seamlessly and affordably, access viable investment opportunities and as the financial institution of choice for Nigerians abroad, we have deployed the necessary resources to actualise this.” He stated.

The Minister of Interior, Ogbeni Rauf Aregbesola, who was also present, reiterated the readiness of the government to collaborate with Nigerians in the diaspora, highlighting the new processes put in place to facilitate passport issuance, noting that all backlog of passport applications would be cleared by the end of May 2021.

Also speaking, the Hon. Minister of State, Foreign Affairs Amb. Zubairu Dada said harnessing the human capital and material resources of Nigerians in the diaspora towards the socio-economic, cultural, and political development of Nigeria can no longer be ignored. He pointed out that the Nigerian diaspora community is well educated, resourceful, skilled, and exposed to global best practices.

The NiDCOM Chairman/CEO, Hon. Abike Dabiri- Erewa explained that the Diaspora Quarterly Lecture Series is projected to be a major aspect of national discourse, where Nigerians abroad can be kept abreast of the government’s policies, programmes and projects.

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Finance

Increase in Price Boosts Revenue of Dangote Sugar by 41.5 Percent in Q1 2021

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Revenue of Dangote Sugar Refinery Plc rose by 41.5 percent to N67.394 billion in the first quarter (Q1) of 2021 from N47.643 billion recorded in the same quarter of 2020.

According to the leading sugar manufacturer, the increase in revenue was a result of the increase in the price of sugar in the first quarter. The company claimed price adjustment was necessary to mitigate the negative effect of inflation and depreciation on the company.

Volumes only rose by 5.7 percent during the quarter despite a 41.5 percent increase in revenue, meaning the increase in price was the main sales catalyst.

In the company’s unaudited financial statements, gross profit grew from N12.721 billion in Q1 2020 to N18.044 billion in Q1 2021.

Similarly, operating profit stood at N15.884 billion, up from N10.747 billion posted in Q1 2020.

Finance cost more than double from N1.353 billion in Q1 2020 to N3.412 billion in Q1 2021.

Dangote Sugar’s profit before tax rose from N9.509 billion recorded in the corresponding quarter to N11.949 billion in the quarter under review.

The company paid N3.646 billion in income tax, slightly higher than N3.137 paid in the same quarter of 2020.

Profit for the period grew from N6.372 billion in Q1 2020 to N8.302 billion in Q1 2021.

Commenting on the company’s performance, Dangote Sugar said “EBITDA increased by 34.7% to N17.02 billion (2020: N12.64 billion) on account of increased earnings. Group profit after taxation for the period increased by 30.3% to N8.30 billion (2020: N6.37 billion) reflecting management’s unrelenting drive to deliver consistent shareholder value.”

On price increase, the company hinged it on series of devaluation carried out in 2020 by the Central Bank of Nigeria (CBN), escalating inflation, port congestion and rising in price of global sugar. Dangote Sugar said its imported raw sugar from Brazil under Federal Government’s backward integration plan.

We have continued to witness high cost of raw materials, energy costs and other input costs due to rising inflation and FX rate fluctuation. Further cost escalation is anticipated in the year as inflationary pressure mounts,” the company said.

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FBN Holdings Suffers 39 Percent Drop in Profit to N15.6 Billion in Q1 2021

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FBN Holdings - Investors King

FBN Holdings Plc profit after tax declined by 39 percent from N23.140 billion recorded in the first quarter (Q1) of 2020 to N15.6 billion in the first quarter of 2021.

In the leading financial institution’s unaudited financial statements released through the Nigerian Exchange Limited, gross earnings declined by 14.5 percent to N137 billion in the period under review, down from N160 billion filed in the previous quarter.

Similarly, net interest income declined from N60.253 billion achieved in Q1 2020 to N52.793 billion.

Net interest income after impairment charge for losses also dipped from N50.547 billion in Q1 2020 to N39.619 billion in Q1 20201. While net fee and commission income rose from N20.773 billion in Q1 2020 to N28.427 billion in Q1 2021.

Profit before tax declined by 34 percent to N18.906 billion in the quarter under review, down from N28.680 billion posted in the corresponding quarter of 2020.

FBN Holdings paid N3.285 billion in income tax in the first quarter of 2020.

Therefore, profit for the period stood at N15.621 billion. While Net Assets contracted from N765.2 billion to N764.8 billion.

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