- Stock Market Rebounds on Dividend Expectations
The Nigerian equities market returned to positive territory last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.40 per cent compared with a decline of 0.39 percent the previous week.
Despite the release of poor quarterly corporate performance by some companies, investors ignored those results and took position ahead of dividend payment for the year ended December 31, 2016.
Consequently, the NSE ASI and market capitalisation appreciated by 0.40 per cent to close the week at 26,328.22 and N9.059 trillion respectively. Similarly, all other Indices finished higher during the week with the exception of the NSE Premium Index that depreciated by 0.13 per cent. Investors were upbeat last week, with the NSE ASI recording gains in four out of the five sessions.
Daily Market performance
Trading resumed for the week last Monday market yesterday resumed the week on a positive note as the NSE ASI appreciated by 0.03 per cent to close at 26,231.37. Market analysts at Meristem Securities Limited, attributed the positive trading to gains by large capitalised stocks.
“We attribute the day’s performance to the positive sentiments in the market, specifically on some large cap stocks. We expect this trend to continue into the week, as we anticipate more bargain hunting activities on counters trading below their intrinsic values,” they said.
A total of 19 stocks appreciated compared with 15 that declined in value. UACN Property Development Company (UPDC) Plc led the price gainers’ chart, advancing by 4.86 per cent to close at N3.02 per share.
UPDC is planning to raise about N5 billion from the capital market through a rights issue of 1.719 billion ordinary shares of 50 kobo each at N3.00 per share on the basis of one new share for every one share already held.
The second day of the week witnessed a bearish trading with the index shedding 0.05 per cent to be at 26,217.54. Similarly, market capitalisation shed N4.8 billion to close at N9.0 trillion.
Shares tanked as the Central Bank of Nigeria’s Monetary Policy Committee (MPC) retained the Monetary Policy Rate (MPR) at 14 per cent. The MPC, which met on Monday and Tuesday voted unanimously to maintain status quo by retaining the: MPR at 14 per cent; Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
However, market operators said retaining the MPR at 14 per cent will make the fixed income securities remain more attractive to investors than the equities market.
Analysts at Meristem Securities Limited, said: “Given that the MPC maintained the status quo on all policy variables, we expect the weak market mood will continue to dictate the direction of activities in the equities market. However, we advise investors to continually assess the market for opportunities to take positions in fundamentally justified stocks ahead of the full year 2016 earnings season.”
Seven-Up-Bottling Company Plc and Custodian and Allied Plc led the price losers, depreciating by 4.9 per cent each to close at N101.40 and N3.63 respectively. NCR Nigeria Plc and NAHCO also shed 4.9 per cent apiece, just as Sterling Bank Plc and Transcorp Plc went down by 4.8 per cent and 4.7 per cent in that order.
On the positive side, Cement Company of Northern Nigeria Plc led the price gainers with 5.0 per cent to close at N4.62 per share. UAC of Nigeria Plc followed with 4.9 per cent, just as NPF Microfinance Bank Plc appreciated by 4.6 per cent.
In terms of sectoral performance, the NSE Banking Index, which had outperformed other sector indices for the most part of the year, dipped 1.1 per cent as investors booked profit in Zenith Bank Plc (-3.5 per cent) and United Bank for Africa Plc (-1.2 per cent).
The bulls regained control of the market on Wednesday even as investors staked N2.434 billion on 190 million shares in 2,896 deals.
The bulls pushed the NSE ASI to close 0.09 per cent higher at 26, 240.45.
The recovery in the market was attributed to the activities of bargain hunters who swooped on shares, making 21 equities to close higher while 16 declined. NASCON Allied Industries Plc led the price gainers with 4.9 per cent trailed by Neimeth International Pharmaceuticals Plc with 4.6 per cent. Custodian and Allied Plc appreciated by 3.3 per cent, just as Oando Plc chalked up 2.3 per cent.
Conversely, Honeywell Four Mills Plc, Livestock Feeds Plc led the price losers with 4.9 per cent apiece. A.G Leventis Plc and UACN Property Development Company Plc shed 4.6 per cent each.
Sectoral performance indicates that only the NSE Banking Index depreciated by 0.08 per cent. The NSE Oil/Gas Index appreciated by 0.49 per cent, while NSE Industrial Goods Index, NSE Insurance Index and NSE Consumer Goods Index grew by 0.41 per cent, 0.14 per cent and 0.04 per cent.
The market sustained its positive performance for the second straight day on Thursday with the NSE ASI going up by 0.2 per cent. Interest showed by bargain hunters in Guaranty Trust Bank, Forte Oil Plc, Zenith Bank Plc, Oando Plc and Stanbic IBTC Holdings bolstered the bullish trading. Apart from the NSE ASI that appreciated by 0.2 per cent, market capitalisation of equities added N17 billion to close at N9.0 trillion.
It was mixed blessings for investors in Stanbic IBTC and Guinness Nigeria. While Stanbic IBTC rose by 1.1 per cent following news of smooth management changes, those in Guinness suffered a depreciation of 5.0 per cent. Guinness reported a N4.6 billion loss after tax for the six months ended December 31, 2016. Commenting on the results, Managing Director/Chief Executive of Guinness Nigeria, Mr. Peter Ndegwa, attributed the poor performance to the challenging economic environment and high finance charges.
Ndegwa said: “We now have both International Premium Spirits (IPS) and locally manufactured mainstream spirits within our portfolio and these contributed to revenue growth for the half year. Our accessible beer brands also continue to grow strongly.”
The equities market sustained the positive tempo on the last trading session for the week as the NSE ASI rising by 0.15 per cent to close at 26,2328,22 compared to an increase of 0.19 per cent recorded the previous day. Similarly, the market capitalisation increased by 0.19 per cent to close at N9.058 trillion. The marginal rise in the index and market cap were prompted by appreciation in the share prices of Total, Nestle, Seven-Up Bottling Company Plc, Zenith Bank and Stanbic IBTC. The value of equities traded also increase by 84.71 per cent to N2.194 billion from N1.187 billion transacted previously. The total volume of equities traded rose by 62.33 per cent to 238 million in 2,725 deals.
In all, investors traded 990.584 million shares worth N18.823 billion in 14,917 deals last week by investors on the floor of the exchange, compared with a total of 1.340 billion shares valued at N8.903 billion that were traded the previous week in 15,733 deals.
The Financial Services Industry led the activity chart with 664.647 million shares valued at N3.896 billion traded in 8,056 deals; thus contributing 67.10 per cent and 20.70 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 133.641 million shares worth N2.602 billion in 2,653 deals. The third place was occupied by Conglomerates Industry with a turnover of 63.189 million shares worth N88.834 million in 635 deals.
Price gainers and losers
Meanwhile, 29 stocks appreciated last week lower than 30 equities of the previous week. Conversely, 30 equities depreciated in price, higher than 27 equities of the previous week. Unity Bank Plc led the price gainers with 15.6 per cent, trailed by Oando Plc with 12.4 per cent. Stanbic IBTC Holdings Plc and Champion Breweries Plc garnered 8.5 and 8.3 per cent respectively. Other top price gainers included: Forte Oil Plc (8.1 per cent); Wema Bank Plc (7.8 per cent); NPF Microfinance Bank Plc (6.6 per cent); Total Nigeria Plc (6.4 per cent); Neimeth International Pharmaceuticals Plc (4.2 per cent) and Seplat Petroleum Development Company Plc (4.1 per cent).
On the contrary, Honeywell Flour Mills Plc led the bears, shedding 11.3 per cent, trailed by MRS Oil Nigeria Plc with 9.7 per cent. Sterling Bank Plc went down by 8.7 per cent, while Caverton Offshore Support Group Plc declined by 8.0 per cent. Livestock Feeds Plc and Transnational Corporation of Nigeria Plc went down by 6.9 per cent apiece just as A.G. Leventis Nigeria Plc, Custodian and Allied Plc, Nigerian Aviation Handling Company Plc and Trans Nationwide Express Plc lost 5.7 per cent, 5.2 per cent and 5.0 per cent in that order.
CBN Pays N14.35 Billion for 263,860 Meters to End Estimated Billings
The Central Bank of Nigeria (CBN) said it has disbursed a total sum of N14.35 billion to the Distribution Companies of Nigeria (DisCOs) for the payment of 263,860 meters under the National Mass Metering Programme (NMMP).
In November 2020, the Federal Government announced that it would make funds available for 1 million meters in the first phase of President Buhari Mass Metering Initiative at no cost to consumers.
Between November 2020 and January 2021, the Federal Government through the CBN has disbursed N14.35 billion.
However, according to the apex bank DisCOs must pay back the amount disbursed based on the previously agreed amortisation schedule.
“The facility disbursed is a loan that must be repaid by the DisCos on the basis of the previously agreed amortisation schedule. The repayment is to be deducted from payments made by consumers into the DisCos accounts with Deposit Money Banks (DMBs),” the CBN stated.
“The maximum tenor of the facility is 10 years but not exceeding 2030, while the moratorium on the principal amount is for a period not exceeding 24 months from the date of loan disbursement.”
A week ago, the Ibadan Electricity Distribution Company (IBEDC) announced it has commenced the distribution of 104,0000 free meters in Ibadan, Oyo State.
This, the IBEDC said was under the ongoing National Metering Scheme of president Muhammadu Buhari.
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.”
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