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Naira to Gain Further on Stock Purchases –Analysts

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  • Naira to Gain Further on Stock Purchases

The naira is expected to strengthen against the United States dollar in the coming week as offshore investors pile into local stocks, currency and financial analysts have said.

According to them, the naira will likely strengthen against the dollar in the coming days as more offshore investors buy up local stocks after MSCI increased the country’s weighting in its frontier market index.

“We are beginning to see some international investors returning to the (stock) market,” a research analyst, Olabisi Ayodeji, told Reuters.

Traders said the re-emergence of offshore interest in the stock market had boosted dollar inflows to the economy, leading to a gradual exchange rate convergence.

The naira was quoted at 365 to the dollar on the black market on Thursday, against 368 per dollar last week. It is trading at around 305.70 to the dollar on the official interbank window.

Meanwhile, the Kenyan shilling is expected to trade in a tight range in the coming week due to demand from multinational companies buying shillings to meet their tax obligations, as well as low oil prices reducing the import bill, according to traders.

At 1101 GMT, commercial banks quoted the shilling at 103.45/65 per dollar, compared with 103.24/45 at last Thursday’s close.

“We’ve seen oil prices go down to 45 dollars per barrel so we don’t expect any un-warranted demand,” said a trader from a commercial bank.

The Ugandan shilling is seen trading in a stable range as the central bank curbs liquidity in the market, making it slightly more expensive to buy dollars.

At 0953 GMT, commercial banks quoted the shilling at 3,583/3,593, little changed from last Thursday’s close of 3,585/3,585.

“We’ll probably see the shilling play stable … in range of 3,575-3,600,” said a trader at a leading commercial bank, adding the excess liquidity removal will keep dollar demand subdued.

The Tanzanian shilling is expected to trade in a tight range in the coming days, mainly due to a general slowdown in business activity.

Commercial banks quoted the shilling at 2,234/2,244 to the dollar on Thursday, barely moved from 2,235/2,245 a week ago.

“We expect stable prices next week due to subdued demand for dollars and a slowdown in inflows of hard currency in the market,” said a trader at CRDB Bank.

Ghana’s cedi is expected to be stable in the week ahead as firms due to a healthy supply of dollars from firms and the central bank, according to traders.

The unit was trading at 4.4085 per dollar by mid-morning on Thursday, compared with 4.4200 a week ago.

An analyst at Accra-based Dortis Research, Joseph Biggles Amponsah, said the cedi could also be supported by falling inflation and short-term lending rates.

The Zambian kwacha is expected to remain firm against the dollar next week as firms sell dollars to pay their workers and suppliers at the end of the month.

At 1007 GMT, commercial banks quoted the currency of Africa’s second biggest copper producer at 9.1800 per dollar from a close of 9.2500 a week ago.

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.

Finance

Nasdaq Set To Launch Options Trading For Coinbase Global

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Less than a week after the largest crypto exchange in the U.S. Coinbase was listed, Nasdaq is set to start trading options for Coinbase Global.

According to Reuters, a representative for Coinbase stated that the COIN.O options will start trading on Nasdaq on Tuesday, April 20.

The launch of equity options will offer a new way for investors to bet on the fortunes of Coinbase. Equity options represent the right, but not the obligation, to buy or sell a stock at a certain price, known as the strike price, on or before an expiration date.

The news follows Coinbase’s direct listing, which saw the firm’s stock fluctuate between a valuation of $429.54 and $310 on its first day of trading.

It was reported that the Chief Executive Officer of Coinbase, Brian Armstrong sold less than 2% of his holdings which worth about $292 million in shares on COIN’s first day of trading. According to filings made with the U.S. Securities and Exchange Commission, Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per share for total proceeds of $291.8 million.

It was also reported that insiders dumped nearly $5 billion in COIN stock shortly after it was listed. Filings on the Coinbase Investor Relations website showed a total of 12,965,079 shares were sold by insiders, worth over $4.6 billion at COIN’s $344 share price at close on Friday.

Yahoo Finance reported the stock has slumped 22.5% from a high of $429.54 on April 14 to a current after-hours trading price of $332.75 where it appears to have settled after Monday’s trading session.

On April 20, Coinbase Pro announced that will add support for new trading pairs for Basic Attention Token (BAT), Cardano (ADA), Decentraland (MANA), and USDC from April 20. The four assets will be paired with three fiat currencies (USD, EUR, GBP), BTC, and ETH, with limited trading functionality to be made available while market liquidity is assessed at launch.

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Banking Sector

Unity Bank Grows Asset by 67.90% to N492.02 Billion, As Gross Earnings Hit N42.71 Billion in FY 2020

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Unity Bank Plc grew its assets base to N492.02billion representing a significant increase of 67.90% from the N293.05 billion of total assets value recorded in 2019. This is even as the agric-focused lender declared gross earnings of N42.71 billion within the period under review.

A review of the Bank’s audited results for full-year ended 31 December 2020, released to the Nigerian Stock Exchange, showed that the Bank improved its bottom line marginally as Profit After Tax, PAT stood at N2.09 billion. Profit Before Tax, PBT closed at N2.22 billion, in a year that was defined by the unmitigated impact of global pandemic characterized by disruptions in business activities and the general downturn that resulted in revenue/returns dip in major leading sectors globally.

The lender substantially grew its customers’ deposit portfolio to N356.62 billion, up from N257.69 billion in the corresponding period of 2019, representing a 38.4% growth. This affirms positive market uptake of the Bank’s product offerings, as well as the lender’s growing customer base to its recent aggressive push with agile customer-centric products, which has played a role in deepening financial services penetration, especially to a wider world, an underserved spectrum of the retail market.

Other major highlight of the audited financial statement relates to growth in its net operating income which rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71% increase. This is even as the net interest income recorded a significant jump, as it rose by 7.60% to N17.75 billion from N16.49 billion in the corresponding period of 2019. Earnings per Share closed at 17.85 Kobo.

The Bank’s gross loans portfolio increased by 92.9% to N206.2 billion in December 2020 from N106.9 billion in December 2019. The Bank’s lending strategy was specially tailored to support the nation’s food agenda. This had the added advantage of improving food security across the country, providing employment to thousands of youths and entrepreneurs, contributing to the conservation of FX stocks and mitigating security challenges by ensuring adequate empowerment of citizens and deepening skills acquisition across the value chain.

Commenting on the result, Unity Bank’s Managing Director/Chief Executive Officer, Mrs. Tomi Somefun stated that the results showed the resilience of the Bank during unprecedented times of uncertainties and our ability to innovate and focus on key balance sheet items that will enable us to maintain the growth trajectory.

She further opined that: “Consequently, for the year under review, the opportunities to significantly create more quality assets for the business, thought to have a sustainable impact, informed part of choices made and we have seen some encouraging market uptake in this regard, apart from the benefits to the enterprise bottom-line that have also started trickling in. Other key performance indicators especially on the liability side of the business were equally not left out. The Bank deployed new product features and augmentation supported by omni-channel, USSD promotions and other channels to enhance services delivery efficiency, drive income generation capacities and enhance steady balance sheet growth for the year”.

Looking ahead, Somefun stated: “we will latch on targeted strategies to deploy significant investment in technology in order to ride the waves of the COVID-19 pandemic. On the back of this, the Bank focuses on achieving major efficiency gains, deepening its retail footprints and penetrating identified cluster market segments, as bulwarks to tapping into various youth markets platforms, in addition to the mass market would get a further boost”.

While laying an outlook for the future, the Unity Bank’s Chief further stated: “The Bank is also looking to consolidate on the gains from its core business areas and niche in the agribusiness sector. The Bank has solidly financed over one million farmers over the past three years. These farmers cut across several primary crop production such as rice, maize, cotton, wheat, sorghum, etc coupled with their rich value chains, and we hope to continue to expand on this as we play our part in driving the country’s quest for self-sufficiency in food production.”

Analysts are of the view that has made an appreciable impact in the agribusiness and its value chains consistently, the market is excited that the current year performance and different initiatives of the Bank show that the agribusiness is bankable not only as a differential positioning but also for sustainable business performance and profitability.

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Banking Sector

Access Bank To Acquire BancABC Botswana

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Access Bank Plc on Monday disclosed that it had entered into a definitive and binding agreement with ABC Holdings Limited to acquire 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).

The transaction, which is subject to regulatory approvals and customary conditions precedent, is expected to close before the end of this quarter.

ABC Holdings is a subsidiary of London Stock Exchange listed group – Atlas Mara Limited.

Access Bank disclosed this in a statement signed by its Company Secretary, Sunday Ekwochi.

Bostwana is renowned for its quality sovereign credit rating and stability. Access Bank’s market entry is expected to further solidify its strategy as, “a strong banking partner in key verticals across retail and corporate banking, including especially supporting trade in payments across southern Africa and Sub-Saharan Africa more broadly.”

Commenting on the deal, the GMD/CEO, Access Bank, Herbert Wigwe, said: “We remain committed to a disciplined and thoughtful expansion strategy in Africa, which we believe will create strong, sustainable returns for our shareholders and stakeholders at large, over the medium and long-term.

“The establishment of Access Bank through this acquisition in the Republic of Botswana will position the bank to deliver a more complete set of banking solutions to its clients active in and across the SADC and COMESA regions.

“This transaction complements our recent strategic growth acquisitions in South Africa, Zambia and Mozambique. We are building a bank of the future that Africans across Africa and the world would be proud of and look forward to welcoming the employees, customers and other stakeholders of BancABC Bostawana to Access Bank.”

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