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Equities Market Sheds 5.1% in First Quarter

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  • Equities Market Sheds 5.1% in First Quarter

The equities market rebounded last week as the Nigerian Stock Exchange (NSE) All-Share Index rose by 0.24 per cent to close at 25,516.34 due to bargain hunting by investors following some impressive corporate results. Some of the companies that reported their 2016 full year results announced dividends for investors, a development that bolstered confidence in the market.

Consequently, the negative performance in the market the previous week was reversed last week. However, the 0.24 per cent was not enough to lift the market from decline in the first quarter. Consequently, the NSE ASI declined by 5.1 per cent in the Q1. Analysis of the market in the last week of the quarter showed that it gained two out of the five trading sessions.

Daily Market performance

Trading at nation’s stock market resumed on a positive note on Monday following investors’ reactions to some improved earnings results reported by companies.

The NSE ASI appreciated 0.12 per cent to close at 25,485.17 as buy interest in Unilever Nigeria, United Bank for Africa (UBA) Plc and Stanbic IBTC Holdings Plc boosted the performance. The three companies had previous week released their audited results for the year ended December 31, 2016, showing improved bottom-lines.

For instance, Stanbic IBTC’s profit after tax (PAT) jumped by 51 per cent to N28.5 billion, fromN18.9 billion in 2015. UBA grew its PAT by 21 per cent from N59.6 billion to N72.6 billion, while Unilever’s PAT soared by 157 per cent from N1.19 billion to N3.07 billion in 2016. Besides, the companies recommended dividends for their various shareholders.

Apparently reacting to the improved performance, investors increased demand for the equities at the stock market, leading to growth in their prices. Unilever appreciated by 5.0 per cent, while UBA and Stanbic IBTC garnered 2.0 per cent and 1.6 per cent respectively. In all, 17 stocks advanced compared to 12 stocks that declined.

However, Lafarge Africa Plc, which rode on the back of its 2016 results to gain 13 per cent the preceding week, began last week on bearish note as some investors moved in to lock in part of the gains. As a result, Lafarge Africa went down by 2.7 per cent and contributed to the fall in NSE Industrial Goods Index, which shed 1.1 per cent.

All other sectors closed in the green led by the NSE Consumer Goods Index with 0.5 per cent on the back of gains in Seven-Up Bottling Company Plc (+5.3 per cent) and Unilever (+5.0 per cent). In the same vein, the NSE Insurance Index and NSE Banking Index appreciated by 0.2 per cent and 0.1 per cent in that order. The NSE Oil & Gas Index recorded a marginal gain of 0.01 per cent.

The positive momentum could not sustain on Tuesday as the price decline suffered by the highest capitalised company in the market, Dangote Cement plc sent the market back to the bears’ territory. Consequently, the Nigerian Stock Exchange All-Share Index fell 0.31 per cent to close at 25, 406.72.

However, the 1.8 per cent decline recorded by Dangote Cement contributed to the bearish close of the market. Ex-Dangote Cement, the index would have appreciated by 0.40 per cent.

In all 22 stocks appreciated compared with 14 that shed value. Seplat Petroleum rode to the top of gainers chart with 10.2 per cent, trailed by Custodian and Allied Plc and International Breweries Plc that chalked up 5 per cent apiece. Fidelity Bank Plc and Seven-Up Bottling Company went up by 3.9 per cent and 3.7 per cent respectively.

Ecobank Transnational Incorporated and Law Union and Rock Insurance Plc led the losers with five per cent each. Total Nigeria trailed with 4.7 per cent, just as Livestock Feeds Plc and Continental Reinsurance Plc shed 4.4 and 4.3 per cent in that order.

Investors traded 916 million shares worth N2.4 billion in 3,342 deals, with Niger Insurance Plc accounting for 724 million shares. In terms of sectoral performance, three indices gained while two declined. The NSE Oil & Gas Index led with 2.7 per cent as a result of price appreciation in Seplat (+10.3 per cent). Similarly, the NSE Banking and the NSE Consumer Goods Indices grew 0.7 per cent and 0.2 per cent on account of gains in GTBank (+1.7 per cent) and International Breweries Plc(+5.0 per cent) respectively.

On the negative side, the NSE Industrial Goods Index declined the most, shedding 2.0 per cent on the back of losses in Lafarge (-2.6 per cent) and Dangote Cement (-1.5 per cent) while the NSE Insurance Index went down by 0.7 per cent.

The equity market declined further on Wednesday, the NSE ASI fell by 0.55 per cent to close at 25,267.68 points. The depreciation recorded in the share prices of Unilever, FBN Holdings, Diamond Bank, Oando and Continental Reinsurance were mainly responsible for the loss.

The total value of stocks traded was N2.62 billion, up by 8.42 per cent from N2.41 billion recorded the previous day. The total volume of stocks traded was 771.65 million in 2, 703 deals. The most actively traded sectors were: Financial Services (296.44 million), Consumer Goods (32.82 million) and, Conglomerates (4.48 million) while the three most actively traded stocks were: Custodian and Allied (284.53 million), Continental Insurance (250.71 million) and Diamond Bank (127.27 million).

After two days of loses, the market recovered on Thursday with the NSE ASI appreciating by 1.05 per cent to close at 25,533.82, while market capitalisation rose to N8.84 trillion.

Market turnover

Meanwhile, investors traded 3.195 billion shares worth N104.217 billion in 14,674 deals last week un from 1.309 billion shares valued at N10.323 billion that exchanged hands in 13,042 deals the previous week. The Financial Services Industry remained the most active in volume terms recording 2.784 billion shares valued at N7.932 billion traded in 9,129 deals; thus contributing 87.12 per cent and 7.61 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 233.982 million shares

worth N92.545 billion in 1,410 deals. The third place was occupied by Consumer Goods Industry with a turnover of 80.623 million shares worth N1.957 billion in 2,138 deals.

Also traded during the week were a total of 52,885 units of Exchange Traded Products (ETPs) valued at N425,464.25 executed in 19 deals compared with a total of 11,585 units valued at N144,678.50 transacted the preceding week in five deals.

Similarly, a total of 2,870 units of Federal Government Bonds valued at N2.638million were traded this week in seven deals, compared with a total of 18,144 units valued at N17.555 million transacted the previous week in 12 deals.

Price Gainers and Losers

A look at the price movement chart showed that 36 equities appreciated in price higher than the 16 equities of the previous week, while 24 equities depreciated in price, lower compared with 35 equities of the previous week. Newrest ASL Nigeria Plc led the price gainers with 14.8 per cent, trailed by Cadbury Nigeria Plc which shed 11.7 per cent.

Seplat Petroleum Development Company Plc added 10.2 per cent, just as Transcorp Hotels Plc and Seven-Up Bottling Company Plc appreciated by 10 per cent and 9.2 per cent respectively.

Trans-Nationwide Express Plc garnered 8.7 per cent, while Unilever Nigeria Plc and United Bank for Africa Plc chalked up 8.3 per cent and 7.1 per cent in that order. International Breweries Plc and Forte Oil Plc went up by 6.6 per cent and 6.2 per cent respectively.

Conversely, Livestock Feeds Plc led the bears with 16.9 per cent trailed by UACN Property Development Company Plc with 6.3 per cent. Guaranty Trust Bank Plc and Ecobank Transnational Incorporated shed 6.0 per cent and 5.2 per cent in that order. Other top price losers were: Law Union and Rock Insurance Plc, May & Baker Nigeria Plc (5.0 per cent apiece). Cement Company of Northern Nigeria Plc (4.8 per cent), Jaiz Bank Plc (4.7 per cent), Unity Bank Plc (4.4 per cent) and Transcorp Plc (4.0 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.

Banking Sector

CIBN, NIBSS Introduce e-Payment Certification Programmes

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CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Finance

Stanbic IBTC Offers Low-Interest Agric Loans

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Stanbic IBTC Bank

Stanbic IBTC Offers Low-Interest Agric Loans

Stanbic IBTC Bank Plc has reaffirmed its commitment to the growth of Nigeria’s agriculture sector by supporting farmers and other players in the agricultural value chain.

As the demands on agribusinesses change seasonally, the financial institution provides financing solutions for agricultural enterprises to suit their requirements.

A statement explained that the needs range from availability of resources, to farming equipment, as well as enhancement of seasonal cashflow, amongst others.

Stanbic IBTC Bank offers various low-interest credit facilities across the agricultural sector that will help clients to cushion the impacts of the Covid-19 pandemic.

Speaking on this, Head, Agribusiness, Stanbic IBTC Bank, Wole Oshin, said the agribusiness financial solution was geared towards ensuring that players in the agriculture space are not hindered by lack of finance.

He said: “The bank’s suite of agribusiness solutions minimises risks, ensures maximum control and optimises profits associated with international trade by making transactions smoother, simpler and safer for all parties involved.

“Some benefits of the Stanbic IBTC Agribusiness Finance include: availability of gap-funding for unforeseen financial needs, maintenance of cash flow and flexibility of repayment terms based on the type of funding. This facility is also versatile and can be utilised for funding resources, vehicles and farming equipment.”

Oshin noted that agricultural enterprises could access overdraft to finance their short-term cash flow and working capital needs.

“With quick and flexible processes, funds are available when needed and interest is paid only on funds utilised, not on the full amount on which the limit is set,” he added.

He further reiterated that the asset finance solution could aid in the financing of all farming vehicle and implement needs, with a wide range of packages to suit business’ cash flow and tax requirements.

“Vehicles and assets such as tractors, harvesters, irrigation equipment and so on, to enhance production,” he said.

Other available facilities are Business Revolving Credit Loan, Agricultural Production Loan and Medium-Term Finance.

These are suitable for grain farmers, individual farmers, groups and entities in the agricultural sector. Our loans are designed to accommodate the purchase of various agricultural inputs (like seeds, fertilizers etc), livestock, agriculture-related products and asset acquisition.

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

FMDQ Securities Exchange has registered the Parthian Partners Limited N20 billion Commercial Paper (CP) Programme to its platform as part of its efforts to assist corporates access funds from the debt capital market (DCM).

The DCM has continued to witness significant activity among corporates seeking a viable avenue to raise capital to meet their financing needs.

According to the FMDQ, the registration of the CP programme strategically positions Parthian Partners Limited to raise short-term finance from the DCM with speed at a time in the future when it determines suitable, through CP issues within the CP Programme limit.

Parthian Partners provides competitive wholesale brokerage services in the African over-the-counter (OTC) markets, and trades in Federal Government of Nigeria (FGN)bonds and treasury bills, state government bonds, local contractor bonds, orporate bonds and eurobonds, providing regular market updates and liaising with market participants and regulators in the African markets to provide independent research on the African fixed income market.

FMDQ said in support of the growth and revitalisation of the Nigerian economy, it championed the resuscitation of the CP market to provide corporate and commercial businesses with the opportunity to meet their short-term funding requirements, whilst building their profiles within the Nigerian DCM.

“In addition to its commendable and efficient registration process, FMDQ Exchange, through its quotation service, will provide stakeholders and market participants with credible and real-time information as part of the exchange’s commitment to facilitate transparency in the fixed income market space,” it said.

Meanwhile, trading in the equities market closed in the green yesterday following buying interest in Zenith Bank Plc (+4.8 per cent), Flour Mills of Nigeria Plc (+6.2 per cent) and Guaranty Trust Bank Plc(+0.8 per cent). As a result, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.03 per cent to close at 40,164.86.

Zenith Bank Plc yesterday released its audited results for the year ended December 31, 2020, announcing a profit before tax (PBT) of N243.294 billion, up from N255.861 billion. Profit after tax (PAT) rose by 10.4 per cent to N230.565 billion from N208.843 billion in 2019.

Trading activity improved as volume and value advanced 16.8 per cent and 7.6 per cent to 338.0 million shares and N3.8 billion respectively. The most traded stocks by volume were FBN Holdings Plc (64.6 million shares), Zenith Bank (52.7 million shares) and Transcorp (42.0 million shares).

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