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Investors Lose Over N1 Trillion in 11 Months

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  • Investors Lose Over N1 Trillion in 11 Months

With over 12 per cent loss suffered so far by equities’ investors as a result of unprecedented fall in prices, stakeholders have urged government to fast track specific growth-inducing policies that would reverse the sluggish trend.

The losses were calculated on start up All-Share Index at the beginning of the year from January 4, 2016 to Wednesday, November 29, 2016.

Indeed, the nation’s capital market has recorded unprecedented lull from the begging of the year due to volatile foreign exchange and other macro- economic concerns.

Already, the investors have linked the depression in the market to current recession, which they claimed has aggravated investors’ apathy for investment.

Among the factors identified as setback to the market is the loss of confidence, high-interest rate and assessed illiquidity of foreign exchange market.

Citing the recent decision by the Central Bank of Nigeria to retain interest rate at 14 per cent, the stakeholders who are currently groaning under intense hardship, argued that institutional investors are already moving their fund to the fixed income securities.

Specifically, the market capitalisation of listed equities which opened the year at N9,757 trillion as at January 4, 2016, now stand at N8,686 trillion as at Tuesday, November 29, 2016.

The decline is more than N1trillion or 12.3 per cent in 11 months, while the All-Share Index went down by 3136.9 points or 12.4 per cent from 28,370.32 to 25,233.42.

The stakeholders who spoke to The Guardian in a separate interview maintained that government have failed to reverse the current economic recession and boost purchasing power.

Speaking on the effect of the current recession on the market, the Managing Director of Crane Securities Limited, Mike Eze, decried neglect of capital market by government, stating that the current interest rate hike depresses investors’ appetite for equities.

He pointed out that the market have witnessed such unprecedented lull because speculators move their investment from to other asset classes, especially, fixed income securities when the interest rate is high.

“It is a function of the several factors: investor apathy (loss of confidence in our local bourse by investors), interest rate (investors are exiting stocks and preferring dollars as a store of value because of the variation), wholesale investors (foreign investors, high networth individuals and institutional investors) are exiting the market,” he said.

He stressed the need for the regulators to embark on massive enlightenment seminars and conferences, while government on its part should make policies that would revamp the economy.

“Government, which should be the biggest participant pretends to be ignorant of the enormous importance of the capital market and of course the gains, especially with reference to economic development inherent in the bourse,” he said.

The President, Independent shareholders Association, Sir Sunny Nwosu, described the state of the stock market as a reflection of the economy.

Nwosu explained that investors are selling off their shares in preparation for the Yuletide, noting that there are surplus shares in the market due to persistent sell-off.

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

Global Deal Activity Down by 4.5% in October 2020

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A total of 6,304 deals were announced globally during October 2020, which is a decrease of 4.5% over the 6,598 deals announced during September, according to GlobalData, a leading data, and analytics company. An analysis of GlobalData’s Financial Deals Database revealed that the deal volume during October remained below the monthly average of Q3 2020.

Aurojyoti Bose, the Lead Analyst at GlobalData, comments: “After demonstrating growth for four consecutive months, the deal volume shrank in October. The decline in deal activity could be attributed to inconsistencies across different regions. The APAC region remained a weak spot, while deal activity remained mostly flat in North America, and the Middle East and Africa (MEA) region witnessed growth in deal activity.”

North America attracted the highest number of investments, followed by APAC, Europe, the MEA, and South, and Central America.

The uncertain global economic landscape lowered the deal volume in October for major markets such as the US, Germany, Australia, France, India, and China compared to the previous month. On the contrary, the UK, Japan, South Korea, and Canada saw growth of 15.6%,14.9%, 3.8%, and 2.2%, respectively, in October as compared to September’s deal volume.

Bose continued: “Most of the deal types witnessed a decline in volume during October compared to the previous month. Private equity, equity offerings, venture financing, debt offerings, and partnership deals volume decreased by a respective 2.4%, 9.1%, 9.8%, 14.6%, and 24.6% – while the deal volume for mergers and acquisitions (M&A) increased by 7.2%.”

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Investment

Japaul to Invest in Chinese Firm H&H to Deepen Mining and Exploration Business

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Japaul Gold & Ventures Plc (Japaul), formerly known as Japaul Oil and Maritime Services Plc, announced it has gotten approval in principle from H&H Mines Limited to invest in or acquire shares in the company once it concluded its fundraising exercise.

According to a statement released through the Nigerian Stock Exchange (NSE), H&H Mines Limited has several licenses, which include two major Mining Leases for 25 years renewable.

The statement noted that extensive exploration has been done on the Mining properties and the last lap of the exploration works is core drilling. This, it said will allow Japaul knows the measured Minerals Reserve contained in the Mine, which it claimed contain Gold, Silver, Lead, Zinc, etc.

Japaul further explained that the need to get the drilling done was what led H&H Mining to engage the services of Xiang Hui International Mining Company Nigeria.

“Since Japaul will eventually be part of H&H Mines Limited, it was necessary that Japaul is carried along on the kind of Contract of Drilling to be entered into, and that was why the signing of the Drilling Contract between the Chinese Company and H&H Mines Limited was concluded at Japaul’s Head Office,” the company stated.

The drilling is expected to be concluded in the next 12 months and within this time, Japaul is expected to have concluded the Fund Raising and formalise her involvement in the Mining.

The company added that Canadian reports revealed that there are huge gold, silver, lead, etc deposits, but it is drilling that will show the actual reserve.

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Africa Investment Forum (AIF) Rescheduled to Hold in 2021 – AfDB

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Investment Forum to Now Hold in 2021 in a Bid to Curb Possible Second Wave of COVID-19  

The Africa Investment Forum scheduled to hold in November 2020 in Johannesburg, South Africa has been rescheduled to hold in2021 as a result of the ongoing global health pandemic.

This announcement was made in a statement by AfDB on Wednesday. The African Development Bank (AfDB) and the Africa Investment Forum founding partners agreed to the postponement of the annual three-day investment market place.

Considering the negative effect of Covid-19 on the global economy, agreement by the two bodies was made after a careful assessment of the impact of COVID-19 on global travels, investments, observing the social distancing rules and curbing the likely possible risk of a second wave.

In the statement, the bank stated that through the forum innovative digital platforms, it would track investments, source for new deals, progress on financial closure of transactions and other existing deals.

“At the 2019 Africa Investment Forum, 57 deals valued at $67.7bn were tabled for discussions. Fifty-two deals worth $40.1bn secured investment interest.

“In July this year, the AIF Founding partners pledged to strengthen strategic partnership engagement and commitments for Africa Investment Forum Market Days 2021, to help ‘reboot investments in Africa.’ They underscored the need to boost local manufacturing while leveraging the continent’s vast resources to unlock investment.”

In the statement, Africa Investment Forum objectives are achieved through the forum’s four pillars; Closing, Connecting, Engaging and Investment Tracking.

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