- NSE Index Rises 3.4% as Stock Market Rallies
The rally at the stock market continued for the third consecutive week as the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) appreciated by 3.4 per cent to close at 26,707.10. Although the market opened for only four days as Monday was declared public holiday to mark the Eid-el-Maulud celebration, the bullish trend was sustained following investors’ swoop on oil and gas stocks due to renewed interest in the sector.
At the end of the week, the market surged by 3.4 per cent to close at 26,707.10, while market capitalisation rose by same margin to close higher at N9.189 trillion. Similarly, all other indices finished higher during the week with the exception of the NSE Insurance, NSE
Consumer Goods that depreciated by 0.53 per cent, 1.68 per cent, and 0.46 per cent in that order. The NSE Oil & Gas Index recorded the highest appreciation of 7.36 per cent following gains posted by Seplat (+20.59 per cent) and Forte Oil (+9.42 per cent). Likewise, the NSE Banking Index followed with a growth of 6.28 per cent while the NSE Industrial Goods Index went up by 3.51 per cent.
Daily Market Performance Summary
In line with its bullish trend, the equity market opened the week on a positive note, as the NSE ASI appreciated by 0.98 per cent to close at 26,071.16, lifted by gains in share prices of Seplat, Forte Oil, Access Bank, Dangote Cement and GTBank.
The total value of stocks traded on the first day was N2.41 billion, up by 47.33 per cent from N1.64 billion recorded the last trading day, while the total volume of stocks traded was 376.69 million shares in 2,885 deals.
The NSE Oil & Gas sector led the sectors, surging by 6.3 per cent on the back of on the back of increased buying interest in Seplat (+10.3 per cent ) and Forte (+10.2 per cent) while the NSE Industrial Goods Index gained 0.9 per cent. The NSE Banking Index followed suit, rising 0.7 per cent as gains in GTBank (+2.0 per cent) and Access Bank (+2.0 per cent) bolstered the sector.
On the contrary, the NSE Insurance Index fell by 0.7 per cent due to losses in AXA Mansard (-4.7 per cent) and WAPIC Insurance (-2.0 per cent). Similarly, the NSE Consumer Goods Index marginally went down by 0.02 per cent on account of declines in Seven-Up Bottling Company Plc (-0.8 per cent).
On Wednesday, which was the second trading day, the market sustained the uptrend as the NSE ASI appreciated by 1.29 per cent to close at 26,407.64. Just like the previous day, the NSE Oil/Gas Index rose 4.4 per cent propelled by gains in the shares of Forte Oil and Seplat.
Investors traded 205.40 million shares valued at N4.28 billion in 3,275 deals. The most actively traded sectors were: Financial Services (159.87 million shares), Consumer Goods (25.34 million shares) and Conglomerates (8.10 million shares), while the most actively traded stocks were: UBA (54.69 million shares), Diamond Bank (22 million shares) and Zenith Bank (21.18 million shares).
All sectors closed in the green save for the NSE Consumer Goods Index which lost on account of declines in Nigerian Breweries (-2.5 per cent) and Champion(-4.2 per cent). The NSE Oil & Gas Index remained the best performing sector with 4.4 per cent growth, while the NSE Banking Index appreciated by 2.3 per cent on the account of strong demand for ETI (+4.9 per cent) and GTBank (+3.0 per cent). In a similar vein, Dangote Cement lifted the NSE Industrial Goods Index by 1.0 per cent, just as the NSE Insurance Index grew by 0.5 per cent due to appreciation in the share price of WAPIC Insurance Plc.
The equity market maintained its upward trend on Thursday with the NSE ASI rising for the 6th consecutive trading session. The positive performance was on price appreciation in banking stocks such as UBA (+4.8 per cent), GTBank (+4.4 per cent) and Zenith (+1.6 per cent). Accordingly, market capitalisation rose N52.1 billion to settle at N9.2 trillion even though market activity fell as volume and value traded declined 2.6 per cent and 64.9 per cent to close at 200.0 million shares and N1.5 billion respectively.
The three most actively traded stocks were: International Energy Insurance Company (37.84 million shares), UBA (29.63 million shares) and FBN Holdings (24.04 million shares). The most actively traded sectors were: Financial Services (173.43 million shares), Conglomerates (11.99 million shares) and Oil and Gas (6.25 million shares).
The appreciation in the price of Dangote Cement shares lifted the equity market on Friday with the NSE ASI rising by 0.56 per cent to close higer at 26,707.10. Apart from Dangote Cement, gains recorded in the share prices of ETI, Oando, Union Bank and Honeywell also contributed to the growth.
Despite the fact that the market opened for four days, the volume and value of shares traded increased compared to the previous week’s performance. Investors traded 1.656 billion shares worth N12.580 billion in 12,860 deals in contrast to a total of 894.759 million shares valued at N10.629 billion that exchanged hands in 13,418 deals the previous week.
The Financial Services Industry remained the most active with 1.504 billion shares valued at N6.183 billion traded in 7,311 deals; thus contributing 90.82 per cent and 49.15 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 51.395 million shares worth N4.753 billion in 2,027 deals. The third place was occupied by the Conglomerates Industry with a turnover of 46.282 million shares worth N52.408 million in 553 deals.
Also traded during the week were a total of 2.439 million units of Exchange Traded Products (ETPs) valued at N18.276 million executed in 15 deals, compared with a total of 2,850 units valued at N355,162.85 transacted the previous week in 21 deals. Similarly, total of 411 units of Federal Government Bonds valued at N428, 995.77 were traded last week in one deal.
Gainers and losers
Meanwhile, 40 equities appreciated last week higher than 27 equities of the previous week. Conversely, 19 equities depreciated in price, compared with 36 equities of the previous week, while 116 equities remained unchanged higher than 112 equities recorded in the preceding week.
Honeywell Flour Mills Plc led the price gainers with 24.5 per cent, trailed by ETI with 21.1 per cent. Seplat went up by 20.5 per cent, just as United Capital Plc, Livestock Feeds Plc and Vitafoam Nigeria Plc chalked up 11.9 per cent, 11.5 per cent and 10.9 per cent respectively.
Other top price gainers included: African Prudential Registrars Plc, Neimeth International Pharmaceuticals Plc (10.0 per cent apiece); Forte Oil Plc (9.4 per cent) and GTBank Plc (2.1 per cent).
Conversely, Portland Paints and Products Nigeria Plc led the price losers with 13.5 per cent. Unilever Nigeria Plc followed with 12.1 per cent. Fidson Healthcare Plc, Caverton and Mobil Oil shed 8.6 per cent, 8.5 per cent and 8.2 per cent in that order.
Beta Glass Company Nigeria Plc, Airline Services and Logistics Plc went down by 7.8 per cent and 5.3 per cent respectively. Avon Crowncaps Plc, AXA Mansard Insurance Plc and Cadbury Nigeria Plc rose by 5.0 per cent, 4.1 per cent and 4.0 per cent in that order.
Global Credit Rating Affirms Sovereign Trust Insurance A Rating
Global Credit Rating, an international rating agency based in South Africa, has affirmed Sovereign Trust Insurance Plc A rating in its latest report released for the month of December 2020.
In a statement released through the Nigerian Stock Exchange (NSE), Global Credit Rating noted “that the Company has shown a great deal of consistency in her claims paying obligations to her numerous customers spread all over the country.
The Report further stated that “the listing of the Rights Issue in 2019 helped in increasing the Shareholders’ funds of the Company by 33.8%, to N7.8b by the end of the Financial year in 2019 as against the figure of N5.8b in 2018.
“Subsequently, by the third quarter of 2020, the Shareholders’ funds had increased to N8.2b which also translated to a 31% increase in the corresponding period of 2019 with a figure of N6.3b. In the Rating Agency’s opinion, Sovereign Trust Insurance Plc is strong in liquidity with more than adequate claims coverage that compares well to industry averages.
“The capital adequacy of the Underwriting Firm is considered strong according to the rating report and this is underpinned by the sizeable capital base catering for the quantum of insurance and market risks assumed. In this regard, the ratio of Shareholders’ funds to NEP, (Net Earned Premium) improved to 189.2% in the Q3 of 2020 as against 130.9% in the corresponding quarter of 2019.
In terms of peer-to-peer performance comparison, “Sovereign Trust Insurance Plc did very well when compared with other selected insurers in terms of Capital, Total Assets, Gross Premium Income (GPI) and Net Premium Income (NPI).”
Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 25.7 Billion in 2020
Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 25.7 Billion in 2020
South Africa – Refinitiv today released the 2020 investment banking analysis for the Sub-Saharan African. According to the report, an estimated US$523.7 million worth of investment banking fees were earned in Sub-Saharan Africa during 2020, down 15% from 2019 and the lowest annual total in six years.
Fee declines were recorded across M&A advisory, debt capital markets underwriting, and syndicated lending. Advisory fees earned from completed M&A transactions generated US$108.3 million, down 55% year-on-year to the lowest level since 2013. Debt capital markets underwriting fees declined 13% to US$64.9 million, a four-year low, while syndicated lending fees fell 3% to US$263.0 million. Equity capital markets underwriting fees totalled US$87.5 million, almost three-times the value recorded during 2019.
Fees generated in the energy & power sector account for 26% of total investment banking fees earned in the region during 2020, up from 10% during the same period last year, while the financial and technology sectors account for 17% and 13% respectively. South Africa generated the most fees in the region, a total of US$279.9 million accounting for 53%, followed by Mozambique with 14%. Boosted by lending fees, Sumitomo Mitsui Financial Group earned the most investment banking fees in the region during 2020, a total of US$57.3 million or an 11% share of the total fee pool.
MERGERS & ACQUISITIONS
The value of announced M&A transactions with any Sub-Saharan African involvement reached US$25.7 billion during 2020, 62% less than the value recorded during 2019 when Naspers’ US$35.9 billion internet assets spin-off boosted merger activity to an all-time high. The value of deals recorded during 2020 is the lowest annually since 2012. The number of deals declined 5% from last year to a seven-year low.
The value of deals with a Sub-Saharan African target declined 39% to a sixteen-year low of US$12.5 billion as domestic M&A within the region declined 44% from last year and the combined value of inbound deals reached just US$7.1 billion, the lowest annual total since 2009.
Chemicals company Sasol agreed to sell a US$2.0 billion stake in LyondellBasell in October, the largest deal in the region during 2020. Boosted by this deal, materials was the most active sector for deal making during 2020, accounting for 23% of Sub-Saharan African target M&A activity, followed by energy & power (19%) and technology (17%). South Africa was the most targeted nation, followed by Uganda. Outbound M&A reached a three-year high of US$6.0 billion during 2020, 13% more than the value recorded during 2019. The value was boosted by Angolan state-owned Sonangol’s purchase of PT Ventures from Africatel Holdings for US$1.0 billion and Templar Investments’ US$1.0 billion offer for Jindal Steel’s Oman unit. With advisory work on twenty deals worth a combined U$4.4 billion, JP Morgan holds to the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during 2020.
EQUITY CAPITAL MARKETS
Sub-Saharan African equity and equity-related issuance reached US$2.5 billion during 2020, 54% more than the value recorded during the previous year, but lower than every other annual total since 2005. The number of deals recorded increased 19% from 2019 but was lower than any other yearly tally since 2012. One initial public offering was recorded during 2020, compared to three in 2019. Malawian telecoms company, Airtel Malawi, raised US$28.7 million on the Malawi Stock Exchange in February. JP Morgan took first place in the Sub-Saharan African ECM underwriting league table during 2020.
DEBT CAPITAL MARKETS
The African Development Bank raised $3 billion in a “Fight Covid-19” social bond at the end of March to help alleviate the economic and social impact the Coronavirus pandemic will have on livelihoods and economies in the region. With this deal, and Ghana’s US$3 billion Eurobond in February, Sub-Saharan African debt issuance totalled US$8.9 billion during the first quarter of 2020, the second-highest first quarter DCM total in the region of all-time. Only US$1.9 billion was raised during the second quarter, the lowest quarterly total in eight years, followed by US$4.0 billion during the third quarter. Prosus raised US$2.2 billion in December, boosting fourth quarter bond issuance in the region to US$4.3 billion. The total proceeds raised during 2020 is US$19.0 billion, down 30% from last year and a four-year low.
Deutsche Bank took the top spot in the Sub-Saharan African bond underwriter ranking during 2020 with US$2.6 billion of related proceeds, or a 13% market share.
DF Holdings Limited Purchases 474,603,596 Shares of AIICO
A majority shareholder in AIICO Insurance Plc, DF Holdings Limited, has increased its stake in the company by purchasing additional shares of 474,603,596.
In a disclosure statement published through the Nigerian Stock Exchange (NSE) and signed by Donald Kanu, the Company Secretary, AIICO, DF Holdings Limited purchased the shares on 31, December 2020 from the Nigerian Stock Exchange in Lagos Nigeria.
The 474,603,596 shares were purchased at N1.17k per share. Meaning, DF Holdings Limited invested N555.286 million in AIICO Insurance. See the details below.
Daily Naira Exchange Rates (Black Market, CBN Official Rates, Bureau De Change) Monday, January 18, 2021
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