- Market Sheds N42bn, Oil, Banking Stocks Lead Losers
The market capitalisation of the Nigerian Stock Exchange declined by N42bn at the close of trading on Monday as oil and gas stocks as well as banking stocks led losers on sector basis.
A total of 262.897 million shares valued at N1.747bn exchanged hands in 2,789 deals.
The NSE market capitalisation dropped to N9.147tn from N9.189tn, while the NSE All-Share Index closed at 26,586.56 basis points from 26,707.10 basis points.
The NSE ASI retreated at the start of the week, which is a deviation from the previous week’s record when it posted a five-month high week-on-week return.
All key sectors pulled back into the red at the end of Monday’s trading session, save for the consumer goods sector.
The oil and gas sector led declines for the third straight session following further profit taking in Forte Oil Plc by 9.75 per cent and losses in Seplat Petroleum Development Company Limited by 4.88 per cent.
The financial services sector also snapped an eight-session rally following losses in heavyweights Ecobank Transnational Incorporated Plc and Guaranty Trust Bank Plc by 4.9 per cent and 0.86 per cent, respectively.
The industrial goods sector closed relatively flat. On the other hand, the consumer goods sector bounced back from a four-session losing streak on the back of advances in Guinness Nigeria Plc, Dangote Sugar Refinery Plc and Dangote Flour Plc by 9.54 per cent, 4.1 per cent and 2.05 per cent, accordingly. This outstripped losses in Unilever Nigeria Plc and PZ Cussons Nigeria Plc by 4.98 per cent and 1.38 per cent, respectively.
Market breadth remained negative with 18 advances and 30 declines.
On what would shape the next trading session, analysts at Vetiva Capital Management Limited, in the firm’s daily report, said, “We believe the relatively tepid sentiment of the last two trading sessions (as indicated by the negative market breadth) could persist today (Tuesday) given the pressure on certain bellwether stocks.
In the global scene, Asian and European markets traded mostly down with investors awaiting the Bank of Japan final policy review on Tuesday while their European counterparts digested Germany economic data. The United States stocks were up slightly at market open ahead of a speech by the Federal Reserve Chair.
Meanwhile, the interbank call rate advanced 50 basis points to 3.92 per cent amid a relatively unchanged system liquidity. At the foreign exchange interbank market, the naira held at N305 against the dollar at the spot market whilst the one year forward rate rose by N29 to settle at N378.00.
Expectedly the fixed income market opened the week to selloffs as bearish sentiment initially triggered by the recently released inflation figures persisted. In the Treasury bills market, yields climbed 42 basis points on average with selling weighted on the short end of the curve.
The most significant advances were seen on the yields of the 10 day-to-maturity, 17DTM and 31DTM bills settling at 9.25 per cent, 12.38 per cent and 14.57 per cent, respectively.
Similarly, yields on the benchmark bonds rose six basis points on average in the bond market. Particularly, yields on the 16.39 per cent January FGN 2022 and 12.1493 per cent FGN July 2034 bonds were up five basis points and six basis points to 15.73 per cent and 15.63 per cent, respectively.
FG Borrows N2.36 Trillion from Capital Market in 2020
Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, said the Federal Government borrowed N2.36 trillion from the nation’s capital market in 2020.
The CEO disclosed this at the 2020 market recap/2021 outlook held on Tuesday.
He said the Federal Government issuances account for 92 percent of the total bond issued in the market in the year.
Onyema further explained that corporate organisations leveraged on low yield environment to expand and embark on debt refinancing, raising a total of N192 billion,
“Capital-raising activities in the fixed income market increased significantly in 2020. The NSE’s bond market capitalisation rose by 35.52 per cent from N12.92tn in 2019 to N17.50tn,” he said.
Onyema noted that “The year 2020 was indeed a historic one for global capital markets. Facing buffeting headwinds, world markets saw sharp swings and steep losses, but largely remained resilient and orderly amid rising uncertainty.
“For The Exchange, renewed investor optimism coupled with improved economic conditions and low fixed income yields, propelled a year end bull run. Of 93 global equity indices tracked by Bloomberg, the NSE All Share Index emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent.”
Speaking on product results for the year, the CEO said, “The Nigerian equities market got off to a strong start in 2020, returning 10.4 per cent by the eighth trading session. By October, the equities market entered a much-awaited bull run.
“Buoyed by the formal declaration of the US president-elect, unattractive fixed income yields and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of -14.90 per cent recorded in 2019.
“During its remarkable year end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility.
“At the close of the year, the NSE’s equity market capitalisation was up by 62.42 per cent, from N12.97tn in 2019 to N21.06tn in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96tn in 2019 to N1.03Tn in 2020.
“Although Initial Public Offering activity was mute, the value of supplementary issues increased dramatically from 2019, rising by 851.37 per cent to N1.42tn, from N148.77bn.
“Also noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (retail: 44.98 per cent; institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent.”
Airtel to Announce Financial Results for Nine Months Ended December 31, 2020 on 29 January 2021
Airtel Africa, one of the leading telecommunications companies in Africa, on Wednesday announced it will report its financial statements for the nine months ended December 31, 2020 on January 29, 2021.
The telecom giant disclosed in a statement signed by Simon O’Hara, Group Company Secretary.
The statement reads “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, will announce its results for the nine months to 31 December 2020 on 29 January 2021.
“Management will host a conference call on the day of results for analysts and investors at 2:00pm GMT.
“Participants are requested to pre-register for the call by navigating to:
“Once registered, participants will receive a calendar invitation with the dial in details for the call.”
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).”
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