- Investors to Take Position as Firms Release Q1 Results
capital market analysts expect investors to take position this week as more quoted companies release their financial results for the first quarter of the year.
Firms including Forte Oil Plc, Unilever Nigeria Plc, Nigerian Breweries Plc and Africa Prudential Registrars Plc have released their Q1 2017 results.
Last week, the equities segment of the Nigerian Stock Exchange closed downbeat for the second consecutive week, dragging the year-to-date loss to 6.27 per cent after shedding 1.26 per cent week-on-week.
The NSE All-Share Index dropped by 1.26 per cent to close at 25,189.37 basis points, while the market capitalisation fell to N8.716tn from N8.827tn the previous week.
Similarly, all other indices finished lower during the week with the exception of the NSE ASeM, NSE Oil/Gas and the NSE Pension Indices that appreciated by 0.06 per cent, 0.60 per cent and 0.36 per cent, respectively.
A total of 896.748 million shares worth N5.918bn in 11,185 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.191 billion shares valued at N6.037bn that exchanged hands the previous week in 11,820 deals.
The financial services industry (measured by volume) led the activity chart with 688.971 million shares valued at N3.637bn traded in 6,374 deals, thus contributing 76.83 per cent and 61.46 per cent to the total equity turnover volume and value respectively.
The conglomerates industry followed with 105.516 million shares worth N207.182m in 944 deals, while the third place was occupied by consumer goods industry with a turnover of 45.172 million shares worth N1.139bn in 1,569 deals.
Trading in the top three equities namely, Diamond Bank Plc, Transnational Corporation of Nigeria Plc and Law Union and Rock Insurance Plc (measured by volume), accounted for 335.346 million shares worth N312.960m in 1,176 deals, contributing 37.42 per cent and 5.29 per cent to the total equity turnover volume and value respectively.
Analysts at Vetiva Capital Management Limited said the market dug deeper into negative territory at the close of trading last week, majorly dragged by sustained losses in Ecobank Transnational Incorporated and negative market reaction to Nigerian Breweries’ Q1 2017 earnings announcement.
They said, “Having seen a number of Q1 2017 earnings in last week, we expect to see some investors positioning in this week as the first quarter earnings season opens further.
“Overall, we foresee continued mixed trading on the bourse at week open,” they added.
Analysts at Meristem Securities Limited noted that profit-taking activities persisted last week, as a number of stocks shed most of their gains recorded in recent weeks.
They further said, “Also, the price decline witnessed by market heavyweight, Dangote Cement Plc, dragged general market performance for the week.
“This week, we expect activities in the equities market to be largely driven by Q1 2017 earnings releases.”
Investors in the nation’s stock market lost N105bn last Tuesday as the NSE market capitalisation plunged to N8.722tn from the N8.827tn. It closed at the previous week.
“In the interim, we expect market performance to be dictated by investors’ reaction to Q1:2017 earnings scorecards which are due this week. Barring any negative earnings surprises, we expect the broader index to close positive as investors hunt for bargains,” said analysts at Afrinvest Securities Limited.
Afreximbank, AAAM to Drive Automotive Investment
Afreximbank, AAAM to Drive Automotive Investment
The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.
President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.
The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.
Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”
Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.
The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.
“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.
“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.
“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.
“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.
“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.
“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.
Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.
FG Warns Foreign Investors Against Enslaving Nigerians
The Federal Government on Monday warned foreign investors against subjecting Nigerians working in their companies to industrial slavery.
The government said the warning became necessary following several complaints against foreign companies maltreating some of their staff.
The Chief Commissioner, Public Complaints Commission, Chile Igbawua, issued the warning during a courtesy call on him by a delegation of Pan Africa United Youth Developments Network who came to lay complaint against some foreign companies allegedly maltreating Nigerians working under them.
The PCC said that it would not allow only its state commissioners to handle the issues due to their magnitude as there had been so many complaints about the ways some of the foreign companies were treating their staff.
At the event, the leader of the delegation, Habib Muhammed, expressed concern over alleged injustice and irregularities perpetrated by some company on Nigeria youths whom they engaged as factory workers.
He called on the Federal Government to look into the alleged slavery and injustice meted on Nigerian youths.
While calling on the foreigners to obey the labour laws of Nigeria, Igbawua said, “Our resources cannot be used to enslave us again.”
He said, “We have labour laws in Nigeria for goodness sake and we also have industrial standards; people working in various industries are entitled to good working conditions and minimum conditions of service.”
He added that the law was clear on the issue of casualisation and should be implemented.
Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline
China had the highest inflow of Foreign Direct Investments (FDI) globally in 2020, surpassing the US which took the lead in 2019.
According to the research data analyzed and published by Comprar Acciones, China’s inflow shot up by 9% to $163 billion up from $140 billion the previous year. Meanwhile, the US had a 49% drop from $251 billion in 2019 to $134 billion.
Based on data from the National Bureau of Statistics, China reported a 2.3% growth in GDP in 2020. It was the only major economy to record a positive growth rate during the year.
Chinese Stock Market Saw 18 Million New Investors in 2020
Global FDI took a hit in 2020, falling by 42% year-over-year (YoY) from $1.49 trillion in 2019 to $859 billion. The figure was 30% lower than the one reported during the 2009 financial crisis.
Developed countries saw the worst performance, sinking by a cumulative 69% YoY to $229 billion. For developing economies, there was a 12% decline of $616 billion. By the end of 2020, developing countries accounted for a 72% share of global FDI, the highest on record. India had the highest growth among top-rated economies, shooting up by 13%.
China bore the brunt of the pandemic much better than its peers, posting a 6.5% GDP growth in Q4 2020. During the year, there were 18.02 million new investors in its mainland stock market, raising the total to 177.77 million. Driving the surge in interest was the stellar performance of Chinese stocks in 2020.
The Shenzen Component grew by 38.7% in 2020, and the CSI 300 increased by 27.2%, compared to the S&P 500’s 16.26% growth. IPO activity also soared, with China and Hong Kong accounting for 40% of global IPO volume in 2020 according to Ernst & Young.
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