- NAHCO, Guinness, Dangote Flour Lead N98bn Market Loss
The Nigerian Aviation Handling Company Plc, Guinness Nigeria Plc and Dangote Flour Plc emerged as the top three losers at the close of trading on the floor of the Nigerian stock Exchange on Thursday as the market capitalisation slid by N98bn.
A total of 137.694 million shares valued at N898.708m exchanged hands in 2,488 deals.
The NSE market capitalisation dropped to N9.018tn from N9.116tn, while the All-Share Index closed at 26,212.09 basis points from 26,495.04 basis points.
NAHCO shares dropped by N0.30 (9.49 per cent) to close at N2.86 from N3.16, while the share price of Guinness depreciated to N78.90 from N83.05, losing N4.15 (five per cent).
Similarly, Dangote Flour share price closed at N4.04 from N4.25, losing N0.21 (4.94 per cent).
The NSE continued to seek its first positive close of the year as sizeable declines in select market heavyweights pulled the NSE ASI down by 1.07 per cent.
On the global scene, major bourses across Europe traded mixed amid the release of impressive full year earnings from the United Kingdom’s house building sector and JP Morgan’s decision to revise lower its valuation on a few European insurers.
Also, the United States opened mixed as investors assessed a series of economic data and the Federal Reserve’s thoughts on President-elect Donald Trump’s policies.
At the NSE, the industrial goods sector came as the biggest loser in Thursday’s session largely on the back of a 4.01 per cent decline in Dangote Cement Plc.
The consumer goods and the oil/gas sectors also closed lower amid losses in blue-chip Guinness and Forte Oil Plc by five per cent and 3.41 per cent, respectively.
The financial services sector, however, recorded its first green close of the year, buoyed by advances across a number of tier-1 banks such as Access bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, United Bank for Africa Plc and Ecobank Transnational Incorporated Plc by 4.96 per cent, 3.30 per cent, 2.49 per cent, 2.22 per cent and 1.99 per cent, respectively.
Market breadth turned positive with 17 advances and 16 declines.
“We highlight that today’s market closing position was largely distorted by the loss in market heavyweight – Danote Cement. Excluding the loss in the stock, the ASI would have closed in the green. Consequently, considering the improved market sentiment (as indicated by the positive market breadth), we foresee a positive close in Friday’s trading session,” analysts at Vetiva Capital Management Limited said in a draft.
Meanwhile, there was an oversubscription of Treasury bills instruments sold as the naira depreciated at the parallel market.
The results of the Primary Market Auction, which was held on Wednesday, showed oversubscription across all instruments. Treasury bills worth N172.85bn were sold in 91-day (N35bn), 182-day (N22bn) and 364-day (N115.85bn), with respective bid-to-cover ratios of 1.02, 1.05 and 1.17 and stop rates of 14 per cent, 17.5 per cent and 18.68 per cent, accordingly.
Money market rates (open-buy-back and overnight rates) increased marginally by 0.50 per cent and one per cent to close at 8.50 per cent and 9.42 per cent, respectively. As a result, the average money market rate advanced by 0.75 per cent to close at 8.96 per cent at the end of the trading day .
Mixed reaction, according to Meristem Securities Limited was witnessed in the Treasury bond space. However, significant demand was observed at the shorter end of the curve.
The April 2017, July 2017, August 2017 and May 2018 instruments all recorded declines of 0.52 per cent, 0.03 per cent, 0.10 per cent and 0.19 per cent, respectively. Consequently, the average bond yield advanced by 0.02 per cent, closing at 16.69 per cent at the end of Thursday’s trades.
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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