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Equities Market Rebounds on Renewed Optimism

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  • Equities Market Rebounds on Renewed Optimism

It was a positive week at the stock market last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.90 per cent to close at 25,238.10. Similarly, market capitalisation appreciated with the same margin to be at N8.734 trillion. The growth compares with a decline of 0.94 per cent recorded the preceding week.

The market had shed value two weeks ago amidst corporate results declared by some companies for the year ended December 31, 2016. Zenith Bank Plc, Transcorp Hotels Plc, Dangote Cement Plc and Nestle Nigeria Plc reported their audited results, announcing various dividends the previous week. Despite the dividends, the market had closed in the bears’ territory.

However, the trend changed last week as more companies announced their results, recommending higher dividends. This development, market analyst said raised investors’ optimism for more positive results. Consequently, the NSE ASI closed 0.90 per cent higher.

Daily Market Performance

The stock market closed last week on a bearish note despite attractive yields declared by some companies in their financial results for the year ended December 31, 2016. Zenith Bank Plc, Transcorp Hotels Plc, and Dangote Cement Plc declared improved results that led to recommendation of dividends by their boards. Although Nestle Nigeria Plc posted a decline in profit for the year, it still recommended a dividend for the shareholders.

However, many investors were not moved by the development and maintained their weak appetite towards the equities market. As a result, the market closed weaker. Out of the five days the market declined in three days and appreciated in two days.

Specifically, the Nigerian Stock Exchange (NSE) All-Share Index pared by 0.94 per cent to close at 25,012.08, while market capitalisation ended at N8.656 trillion.

However, all other Indices finished higher during the week with the exception of the NSE Premium and NSE Industrial Goods Indices that depreciated by 4.47 per cent and 2.33 per cent respectively while the ASEM Index closed flat.

Daily Market performance

The equity market started the week on a negative note with the NSE ASI depreciated by 1.72 per cent to close at 24,581.99, following depreciation recorded in the share prices of Access Bank, Dangote Cement, Unilever, Guinness and FBN Holdings among others.

The year-to-date (YTD) decline worsened to 8.5 per cent on Monday. Performance across sectors was mixed as three indices advanced while two declined. The NSE Consumer Goods Idex appreciated the most, rising by 3.7 per cent as Nestle Nigeria and Nigerian Breweries rising by 10 per cent and 0.9 per cent respectively to bolster the index.

In the same vein, the NSE Oil & Gas Index gained 3.3 per cent on account of appreciation by Forte Oil Plc(+5.1 per cent) while the NSE Insurance Index grew by 0.4 per cent.

On the negative side, the NSE Industrial Goods Index fell by 5.9 per cent as investors off-load Dangote Cement, which shed 7.0 per cent. The stock had depreciated 11.7 since its 2016 financial results were published the previous week. The NSE Banking Index slid 0.3 per cent despite an impressive 2016 full year results submitted on Monday. The equity fell by 3.7 per cent.

The bulls surfaced on Tuesday to take over control of the market lifted by Dangote Cement Plc. The NSE ASI rose by 2.28 per cent. In all, the bullish trend was driven by appreciation in the share price of Transcorp (+7.14 per cent), Guinness (+4.97 per cent) Dangote Cement (+4.92 per cent), Paintcom (+4.84 per cent) and Dangote Flour(+4.11).

The value of equities traded increased by 94.59 per cent to N2.595 billion, while volume of trading also rose by 78.7 per cent to 215 million in 3,689 deals.

The five stocks that drove activities in volume terms included: Access Bank (43.7 million), Zenith Bank (42.6 million), UBA (18.9 million), FBN Holdings (18.2 million), UCAP (13.4 million) and NEM (10.4 million).

After recording a positive performance on Tuesday, the market was depressed on Wednesday by a number of highly capitalised stocks. Consequently, the NSE ASI fell by 0.57 per cent to close at 24,986.02. The decline recorded in the share prices of GTBank, Dangote Cement, Lafarge Africa, FBN Holdings and Zenith Bank were mainly responsible for the loss.

In terms of sectoral performance, the NSE Consumer Goods Index was the only gainer, improving by 3.0 per cent following price appreciation in Nigerian Breweries(+5.0 per cent) and Guinness (+3.9 per cent).

The NSE Industrial Goods Index was the biggest decliner, falling 3.5 per cent as sell offs in Lafarge Africa Plc (-5.0 per cent) and Dangote Cement Plc (-2.8 per cent) constituted a drag on the index. Similarly, the NSE Oil & Gas Index shed 2.5 per cent following sell pressure on Seplat (-5.0 per cent) and Forte (-5.0 per cent) just as the NSE Banking Index lost 0.1 per cent.

Again, the bulls returned on Thursday to take control of the market, making the NSE ASI to close 0.74 per cent higher. There were 16 gainers and nine losers on Thursday. Nestle Nigeria and Dangote Cement Plc led the gainers with 5.0 apeice to close at N725.55 and N159.75.

Medview Airlines Plc followed with 4.9 per cent, while NEM Insurance Plc appreciated by (4.82 per cent. Honeywell Flour Mills chalked up 4.3 per cent.

On the negative side, Nigerian Breweries Plc led the price losers with 5.00 per cent to close at N130.36. Also, Guaranty Trust Bank, which released its 2016 the previous day, fell by 4.8 per cent.

GTBank had on Wednesday reported gross earnings of N414.62 billion for the year ended December 31, 2016, showing an increase of 37 per cent from N301.85 billion in 2015. Profit before tax stood at N165.14billion, representing a growth of 37 per cent over N120.69billion recorded in 2015, while profit after tax rose from N99.436 billion in 2015 to N132 billion.

The bank grew its loan book grew by 16 per cent from N1.373trillion in 2015 to N1.590 trillion in 2016, just as total deposits grew by 29 per cent to N2.111trillion from N1.637trillion in 2015.

Based on the results, the bank has proposed final dividend of 175 kobo, bringing the total dividend to 200 kobo per share. The bank has already paid an interim dividend of 25 kobo.

Performance across sectors was mixed with indices appreciated while three declined. The NSE Industrial Goods Index advanced the most, growing by 2.4 per cent boosted by Dangote Cement(+5.0 per cent). Similarly, the NSE Insurance Index appreciated 0.2 per cent. Conversely, the NSE Consumer Goods Index led sector decliners, shedding 2.0 per cent on account of profit taking in Nigerian Breweries ( -5.0 per cent). Also, the NSE Banking and Oil & Gas Indices went down by 1.3 per cent and 0.3 per cent respectively.

The bulls extended their hold on the market for the second day to close on a positive note. Specifically, the NSE ASI appreciated by 0.27 per cent to close at 25,238.01. Gains by Unilever, Forte Oil, Dangote Cement, Nestle, and Zenith Bank propelled the growth recorded for the last day of the week.

The total value of stocks traded on Friday was N2.31 billion, up by 5.81 per cent from N2.19 billion recorded the previous day. The total volume of stocks traded was 245.38 million 3,260 deals. The three actively traded sectors were: Financial Services (229.72 million), Consumer Goods (5.58 million), and Conglomerates (4.26 million), while three most actively traded stocks were: Zenith Bank (87.18mn), Diamond Bank (38.58mn) and FBN Holdings (30.10mn).

Market Turnover

In all, investors traded 1.024 billion shares worth N12.464 billion in 16,400 deals last week, compared with 1.387 billion shares valued at N13.726 billion that exchanged hands the previous week in 5,422 deals.

As usual, the Financial Services Industry remained the most activity leading with 850.758 million shares valued at N7.083 billion traded in 10,358 deals. The Consumer Goods Industry followed with 78.421 million shares worth N3.9 billion in 2,545 deals, while the third place was occupied by Conglomerates Industry with a turnover of 46.196 million shares worth N70.668 million in 536 deals.

Also traded during the week were a total of 1,020 units of Exchange Traded Products (ETPs) valued at N51,316.00 executed in four deals.

A total of 6,686 units of Federal Government Bonds valued at N5.583 million were traded this week in 7 deals, compared with a total of 375 units valued at N447,055.02 transacted the previous week in five deals.

Price Gainers and Losers

Meanwhile, 24 equities appreciated last week, while 31 depreciated. Nestle Nigeria led the price gainers chalking up 16.9 per cent, trailed by Unilever Nigeria Plc with 11.4 per cent. N.E.M Insurance Plc appreciated by 9.6 per cent, just as Honeywell Flour Mills Plc ended 5.0 per cent higher.

Other top price gainers included: Continental Reinsurance Plc (4.9 per cent); Paints and Coatings Manufacturers Plc(4.8 per cent); Newrest ASL (4.6 per cent);

Transcorp Plc (4.3 per cent); Champion Breweries Plc (4.2 per cent) and Julius Berger Nigeria Plc (4.1 per cent).

Conversely, African Prudential Registrars Plc led the price losers with 15.5 per cent. United Capital Plc trailed with 15.1 per cent. Nigerian Aviation Handling Company Plc and Seven-Up Bottling Company Plc shed 12 per cent and 9.4 per cent in that order.

Livestock Feeds Plc went down by 9.4 per cent, just as Eterna Plc and Unity Bank Plc depreciated by 9.4 per cent and 8.2 per cent respectively. Other price losers were Transcorp Hotels Plc (8.0 per cent); Ashaka Cement Plc (7.9 per cent) and Lafarge Africa Plc (6.9 per cent).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Equatorial Guinea to Launch Vision on Post-COVID Energy Transition Plans with Report and Film

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The Africa Energy Series (AES): Equatorial Guinea 2021 campaign – comprising a report and a documentary – will serve as a critical tool to navigate the energy investment landscape in one of Africa’s more mature petroleum producing markets; Equatorial Guinea has largely been able to sustain its pace of engagement with global investors in the face of COVID-19, forecasting $1.1 billion in FDI in oil and gas activities in 2021; The third edition of the AES: Equatorial Guinea 2021 report will be released at Africa Oil & Power’s U.S. Africa Energy Forum 2021 networking event in Washington, D.C. this July.

Africa Oil & Power is proud to announce the upcoming launch of its Africa Energy Series (AES): Equatorial Guinea 2021 investment report and documentary, as part of a multimedia campaign set to champion the domestic energy sector and shape the West and Central African energy narrative.

The dual-language publication will target key developments driving a post-COVID-19 recovery in Equatorial Guinea – namely, the growth of petroleum and power industries; regional gas monetization initiatives; a clean energy transition; the impact of environmental, social and governance criteria; and expansion of the national diversification agenda.

A 30-minute documentary will provide a visual complement to the publication, featuring first-hand interviews with government officials, private sector players, industry regulators and energy experts discussing Equatorial Guinea’s unparalleled ambition and future plans.

“From spearheading regional gas monetization initiatives to drilling new exploration wells as early as Q2 2021, Equatorial Guinea continues to cement its reputation as a progressive, dynamic force on the African energy stage,” said H.E. Gabriel Obiang Lima, Minister of Mines and Hydrocarbons. “The Africa Energy Series publication in conjunction with a detailed documentary format, gives us the voice to showcase the depth of our full-stream investment opportunities to a global audience.”

Since the onset of COVID-19, Equatorial Guinea has been proactive in safeguarding opportunities for foreign investors and continuing to drive capital into its hydrocarbon resources. In February, Chevron achieved first gas flow from the successful execution of its Alen Gas Monetization project, a $475-million investment representing the first phase of Equatorial Guinea’s Gas Mega Hub masterplan.

The Ministry of Mines and Hydrocarbons is currently promoting several capital-intensive projects – including the construction of modular oil refineries, a gold refinery, liquefied petroleum gas strategic tanks, a urea plant and the expansion of a compressed natural gas project – which are open for investment. Last December, the Ministry of Mines and Hydrocarbons announced a forecast of $1.1 billion in foreign direct investment in oil and gas activities in 2021.

Active in Equatorial Guinea since 2015, AOP released its first AES documentary on the country in 2016, followed by investment reports in 2018 and 2019.

The AES: Equatorial Guinea 2021 investment report will be launched at the U.S. Africa Energy Forum 2021 online seminar and in-person networking event in Washington, DC. (July 12). The documentary will be launched at the U.S. Africa Energy Forum conference in Houston (October 4-5) and broadcast globally on news networks.

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U.S. Africa Energy Forum 2021 Launches: Promotes U.S. Role as Primary Investor in African Energy

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The U.S. Africa Energy Forum 2021 – organized by Africa Oil & Power, in partnership with the African Energy Chamber’s U.S.-Africa Committee – will foster alignment between U.S. and African governments’ energy policies and highlight African oil, gas, power and renewable projects across the energy value chain for U.S. investors; the multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions that drive long-term policy formation and project execution; the in-person, two-day summit and gala dinner will be hosted in Houston, Texas (October 4-5, 2021) and an online seminar and in-person networking event will be held in Washington D.C. (July 12).

Africa Oil & Power (AOP) and the African Energy Chamber are excited to announce the launch of the first-ever U.S. Africa Energy Forum (USAEF). This event aims to create deeper cooperation between the U.S. and Africa on energy policy, to reach alignment on long term sustainability goals, to stimulate greater American investment in the African oil, gas and power sectors, and to engage and reposition the U.S. as the primary partner of choice for African energy developments.

Under the theme “New Horizons for U.S. Africa Energy Investment” the forum will explore diverse foreign investment and export opportunities across the continent, including natural gas as a vital fuel for the energy transition; energy storage and battery minerals; Africa’s place in global energy supply chains; the benefits of the African Continental Free Trade Area; evolving energy technologies and how they relate to the future role of petroleum resources; and on-and off-grid power developments.

An online seminar and in-person networking event will be held in Washington D.C. on July 12, 2021, building up to the in-person U.S. Africa Energy Forum summit and gala dinner, to be hosted in Houston, Texas, on October 4-5, 2021. Africa Oil & Power and the African Energy Chamber invite all U.S.-based companies with an interest in engaging with African industry leaders and project developers to participate in the USAEF Houston summit.

This initiative comes at an important juncture in U.S.-Africa relations. The Biden Administration’s announcements of its intentions to proactively build a stronger U.S.-Africa partnership coincides with the fact that African projects are seeing rising interest from U.S. companies and lending institutions alike. The USAEF event is thus dedicated to enabling dialogue between its participants that advances these developments.

“Our mission has always been to showcase the resource potential that Africa has to offer while at the same time showing its growing preference for sustainable energy policies and technologies. Toward that end, we hope it becomes evident that Africa does not just want investment capital: it wants smart capital and an accompanying partnership with the investors,” says James Chester, Senior Director of Africa Oil & Power. “The U.S. Africa Energy Forum represents the first-of-its-kind opportunity to catalyze U.S. participation in Africa’s energy transformation – via technology, policy support, capital injection and skills development – and turns a new page in the chapter on global energy investment.”

In partnership with the African Energy Chamber’s U.S.-Africa Committee, AOP will introduce American companies to African opportunities and advance an agenda of sustainable, long-term investment in African energy and other sectors by U.S. organizations.

“The rise in support from the U.S. to the continent is a credit to Africa itself, which is increasingly viewed as a favored destination for global investors, multilaterals and export credit agencies,” says Jude Kearney, President of Kearney Africa and former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration. “Africa continues to command a healthy share of global FDI in oil and gas industries. It has for decades shown that investment in those sectors is favorable compared to other jurisdictions and can be successful by many measures. Even as Africa and the rest of the world wrestles with a global pandemic, Africa’s energy sector shows vitality and resiliency – not only in hydrocarbons but in regard to new opportunities in mining, liquefied natural gas, and agriculture.”

Both African governments and private sector sponsors of African energy projects value highly the combination of investment and partnership that US investors famously convey. The USAEF seeks to enable successful partnerships between its participants such that the energy development goals of U.S. investors and strategic partners and their African counterparts can be achieved.

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Angola’s Petroleum Agency Outlines Timeline for Ongoing Bid-round

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Angola’s National Oil, Gas and Biofuel’s Agency (ANPG) has outlined its timetable for the evaluation of its ongoing 2020 bid round, as interest in the acreage on offer continues to grow.

In line with its statutory duties as national concessionaire in charge of the attribution of petroleum exploration blocks, the ANPG has sought to adjust its processes to remain competitive in the current market environment, which is dominated by concerns around COVID-19, long-term demand considerations and stiff competition from new and promising frontiers like Guyana and Suriname.

The ongoing bid-round is a manifestation of Angola’s strategy for the continuous attribution of petroleum concessions 2019-2025 which was approved and codified by Presidential Decree no. 52/19, of 18 February 2019. The aim of the strategy is to provide access to promising acreage to competent explorers in an effort to increase geological knowledge about Angola’s hydrocarbons potential and ultimately increase proven reserves.

A hybrid online and physical roadshow for the current bid-round is scheduled for April 6 in at the Talatona Convention Centre in Luanda. This event will provide the opportunity for investors to engage with the agency regarding the blocks on offer, the data packages and the accessibility studies, as well as touch upon environmental, logistical and local content issues.

This will kickstart a series of both digital and in-person roadshows and technical presentations to promote the blocks to be awarded in key international markets. The acreages on offer include:

  • Three blocks of the lower Congo onshore Basin CON1, CON5 and CON6
  • Six of the Kwanza onshore Basin (KON5, KON6, KON8, KON9, KON17 and KON20)

In line with the provisions of Presidential Decree No. 86/18, of 2 April 2019, which establishes the rules for the organization of bid rounds, the ongoing 2020 bid round will unfold as follows:

  • Tender Launch
  • Proposal submission
  • The opening of offers from potential suitors in a public setting
  • The evaluation and qualification of proposals
  • The submission of the evaluation report to the Ministry of Mineral Resources and Petroleum and Gas
  • Contract negotiation with the winners of the bid-round
  • Signature

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