- Index Appreciates by 1.25% as 20 Stocks Gain
The Nigerian equities market closed on a positive note on Monday as 20 stocks gained, boosting the Nigerian Stock Exchange All-Share Index by 1.25 per cent.
The NSE market capitalisation rose to N9.145tn from N9.032tn, as the NSE ASI closed at 26,580.22 basis points from 26,251.39 basis points recorded on Friday.
A total of 219.025 million shares valued at N1.407bn were traded in 3,423 deals.
The NSE ASI halted its losing streak to settle the year-to-date return at -1.10 per cent.
On the other hand, the volume and turnover of transactions pared by 0.56 per cent and 7.41 per cent, respectively, at the close of trading. Twenty stocks appreciated in value while 17 declined at the end of Monday’s trading activities.
On the gainers’ chart for the day were United Capital Plc, FCMB Group Plc, Fidelity Bank Plc, Sterling Bank Plc and African Prudential Registrars, which appreciated by 9.60 per cent, 9.40 per cent, 8.43 per cent, 7.14 per cent and 5.63 per cent, respectively.
However, the stocks of 7UP Bottling Company Plc, Ashaka Cement Plc, Cadbury Nigeria Plc, Capital Hotel Plc and the Nigerian Aviation Handling Company Plc fell by 4.95 per cent, 4.86 per cent and 4.78 per cent, respectively.
Market performance, as measured by the NSE indices, reflected the positive sentiments in the market as most sectors recorded gains. However, the food/beverage and oil/gas sectors declined by 0.27 per cent and 0.18 per cent, accordingly.
“We attribute this rebound to bullish activities on some stocks trading at low prices. We expect the rest of the week to be swayed by mixed investors’ sentiments, possibly skewed more towards bargain-hunting,” analysts at Meristem Securities Limited said in the firm’s daily post.
At the start of the week, the Central Bank of Nigeria conducted an Open Market Operation auction offering N30bn on the 150 day-to-maturity and 318DTM bills. The apex bank eventually sold N22bn and N201bn at respective stop rates of 18 per cent and 18.6 per cent (effective yields: 19.44 per cent and 22.20 per cent).
Despite this, the interbank call rate moderated by 41 basis points to 7.92 per cent. At the foreign exchange interbank market, the naira remained unchanged at N305 and N378 against the dollar for the spot rate and one-year forward rate respectively.
The fixed income market trend remained the same at week open as the bullish sentiment on Treasury bills contrasted with the bearish sentiment in the bond space. Treasury bill yields moderated by eight basis points on the average with the largest declines observed on the mid-dated maturities. Specifically, yields on the 122DTM, 234DTM and 241DTM bills moderated to 15.74 per cent, 18.79 per cent and 19.36 per cent, respectively. Meanwhile, yields on benchmark bonds rose 11 basis points on the average amid advances across the entire space.
Notably, yields on the 8.50 per cent FGN November 2029 and 12.1493 per cent FGN July 2034 bonds climbed by 14 basis points and 16 basis points to close at 16.30 per cent and 16.02 per cent, respectively.
The Debt Management Office released its bond issuance calendar for Q1 2017, outlining an average monthly issuance of N130bn. “While we expect bullish trading to persist in the Treasury bills market amid healthy demand, we believe the higher volume on offer may further pressure bond yields higher in the days ahead,” analysts at vetiva Capital Management Limited said.
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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