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Investors Gain N114bn on NSE in March

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Egypt Stocks
  • Investors Gain N114bn on NSE in March

At the backdrop of a lack-luster performance of equities in the first quarter 2017 (Q1’17) there seems to be a recovery in the last month of the quarter, as stock market review for the period indicated that investors recorded N114 billion gains at the end of March. The market lost N330 billion in Q1’17.

The consumer goods sector towered above all other sectors in terms of return-on-investment recording 8.1 per cent return, while the banking sector came farther down at the bottom of the ladder with 0.1 per cent return, a development capital market operators attributed to low investors’ confidence in banking stocks as the profits recorded so far are tied to foreign exchange gains. Consumer goods sector, according to them are in line to benefit from further foreign exchange reforms as the Naira continues to strengthen against the dollar.

Also, the financial services sector driven by activities in the insurance stocks, buoyed activities in the market in terms of volume traded with the sector accounting for 14.13 billion of total traded volume during the month.

Specifically, at the close of trading session on Friday, the market capitalisation which represent investors’ wealth appreciated by N114 billion to N8.83 trillion from N8.72 trillion it closed on Wednesday, March 1, 2017. This represents 1.3 per cent increase. The other market metric, the All Share Index, rose to 25, 516.34 basis points from 25,183.10 points.

Financial services leads volume

The financial services sector driven by activities in Unity Kapital Assurance Plc, Continental Reinsurance Plc and Diamond Bank Plc accounted for 14.23 billion units of traded volume and N40.69 billion value of traded stocks out of 19.76 million shares valued at N227.24 billion traded during the month. This indicated, 38.9 per cent and 82.5 per cent of both volume and value traded respectively. The consumer goods sector followed with 753.54 million shares worth N32.97 million in 30,666 deals, while oil and gas sector closed as the third, accounting for 646.75 million units valued at N111.98 million in 20,140 deals.

Operators React

Explaining why the high returns recorded in the consumer goods sector in comparison to the paltry returns in the banking sector, Mr. David Adonri, Managing Director/CEO, Highcap Securities, stated: “Investors probably have low confidence because the banking sector is closely tied to value of the currency and a lot of them declared profit based on foreign exchange gains. And foreign investors believe that is not sustainable. They believe that if situation changes, those profits will turn to nothing.

That is why they are still sceptical about the sector and they also believe that the rating agencies have, in recent times, been downgrading Nigerian banks and as a result, investors’ confidence is not very high in that sector.”

On the consumers good sector, he said: “As Nigeria is moving out of stagflation, that is the sector that will be turned around much more easily than the other sectors because as the exchange rate becomes favourable, it means that their productive activity and those businesses will be turned around.”

Agreeing with him, Chinenye Anyanwu, Managing Director/CEO, Dependable Securities, said that investors’ disposition towards the banking sector is manifested in their reaction to Zenith Bank’s dividend declaration that attracted less than expected patronage to the shares. “Can you imagine Zenith Bank paying the amount of dividend it paid this year, yet the market did not react appropriately. It is that same feeling that these results look like smoke-screen, it looks like they are not sustainable and people are cautious to trade in that area.”

He also argued that the consumer goods sector has always performed better than the banking sectors most of the times because the financial services sector is over-regulated.

“Investors believe that things can only get better in the consumer goods sector as the economy keeps improving. The expectation of improvement in the economy causes patronage and investors believe that the sector’s ability to sustain growth is higher,” Anyanwu added.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Investment

Saudi Arabia Aims for $80 Billion Tourism Investment to Fuel Vision 2030 Goals

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Saudi Arabia is embarking on a bold venture to attract up to $80 billion in private investment into its burgeoning tourism industry, a move pivotal to realizing its ambitious Vision 2030 objectives.

Tourism Minister Ahmed Al Khateeb unveiled the kingdom’s aspiration during an interview in Riyadh, emphasizing the imperative role of the private sector in spearheading investment endeavors.

With plans to disburse approximately $800 billion on tourism over the next decade, Saudi Arabia is steadfast in its pursuit to diversify its economy and reduce dependency on oil revenues.

Vision 2030 outlines a trajectory for the kingdom to metamorphose into one of the world’s premier tourist destinations, targeting 150 million annual visitors by 2030, a significant portion originating from overseas.

While the government and sovereign wealth fund have historically fueled tourism development, securing substantial foreign direct investment, particularly from the private sector, emerges as paramount in expediting Vision 2030 initiatives.

The kingdom’s fiscal projections, forecasting deficits until 2026, underscore the urgency of engaging private investors to actualize the ambitious tourism blueprint.

Saudi Arabia, having welcomed 100 million tourists in 2023, predominantly domestic travelers, eyes international markets such as India, China, the UK, France, and Germany for tourist influx.

A new program launched by the Ministry of Tourism aims to streamline investment processes, potentially unlocking $11 billion in private investment, bolstering Saudi Arabia’s tourism trajectory and reshaping its economic landscape.

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CBN Unveils Plan to Settle N1.64 Trillion Treasury Bills in Q2 2024

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FG Borrows

The Central Bank of Nigeria (CBN) has announced its strategic approach to managing liquidity and meeting financial obligations by unveiling a comprehensive plan to settle Treasury Bills (TBs) worth N1.64 trillion during the second quarter of 2024.

This initiative, part of the CBN’s Nigeria Treasury Bills Issue programme, aims to regulate the money supply within the economy while effectively managing liquidity dynamics.

According to documents obtained by Investors King, the TBs settlement program is slated to commence on March 7th and conclude on May 23rd, 2024.

The CBN will focus on settling TBs with varying tenors, including N414.29 billion on 91 days, N43.74 billion on 182 days, and a substantial N1.18 trillion on 364 days.

The breakdown of the settlement plan reveals monthly settlements to address maturing TBs. In March, the CBN plans to settle N660.62 billion worth of TBs, followed by N292.17 billion in April and N688.3 billion in May.

Market analysts interpret this move as a testament to the CBN’s commitment to managing financial obligations and maintaining economic stability.

It provides investors with opportunities to engage in short-term financial instruments while contributing to overall liquidity dynamics.

The strategic settlement plan reflects the CBN’s proactive stance in navigating economic challenges and ensuring stability within the financial landscape.

As the apex bank implements these measures, stakeholders will closely monitor their impact on market dynamics and economic indicators, anticipating implications for investment decisions and monetary policy outlooks.

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China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

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General Images Of Residential Property

China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

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