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Equities Market Defies Profit Taking, Gains N188bn

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  • Equities Market Defies Profit Taking, Gains N188bn

The Nigerian equities market remained bullish last week on continuing positive investor sentiments, which lifted the market capitalisation by N188 billion or 1.63 per cent to close higher at N11.692 trillion.

Similarly, the Nigerian Stock Exchange (NSE) All-Share Index appreciated by 1.60 per cent to be at 33,810.56 amidst profit taking activities. Although some investors moved in to lock in profits recorded in the past weeks, the bulls had the upper hand, making the market to close the week higher for the fourth consecutive week. Apart from the index and market capitalisation ending the week positively, the value of stocks traded equally rose to N32.042 billion invested in 2.737 billion.

All other Indices finished higher during the week with the exception of the NSE ASeM, NSE Oil/Gas, NSE Lotus II and NSE Industrial Goods Indices that depreciated by 0.32 per cent, 4.20 per cent, 0.71 per cent, and 0.28 per cent respectively.

Daily Market performance

As expected, the trading resumed at the stock market on Monday with investors taking profit. Consequently, the benchmark index fell by 0.12 per cent to close at 33,235.28, while market capitalisation shed N14.3 billion to close at N11.49 trillion.

The decline was influenced by profit-taking in Nestle, International Breweries Plc and Total Nigeria Plc among others. According to analysts at Meristem Securities Limited, “while we observed that the positive sentiments towards a number of counters were still maintained, we attribute the day’s marginal decline to profit-taking activities on counters that had rallied in recent weeks.”

International Breweries Plc led the price losers, depreciating by 8.6 per cent to close at 29.45 per share. The stock had surged by 33.2 per cent last week on the news of its planned merger with two other breweries. UAC of Nigeria Plc shed 5.8 per cent, while AIICO Insurance Plc went down by 5.3 per cent. Fidelity Bank Plc and University Press Plc depreciated by 4.9 per cent apiece.

Seven-Up Bottling Company Plc, Learn Africa Plc and United Capital Plc closed 4.8 per cent, 4.7 per cent and 4.4 per cent lower respectively. Similarly, Nestle Nigeria Plc, NEM Insurance Plc and Total Nigeria Plc shed 4.1 per cent, 4.0pe cent and 3.9 per cent respectively.

Total Nigeria had in the previous week assured shareholders of its commitment to grow its business in Nigeria in particular and Africa at large. According to the Chairman of Total Nigeria Mr. Stanislas, the company has no intention to withdraw it business from Nigeria or Africa.

The equity market depreciated further on Tuesday as profit taking continued, leading to a decline of 0.28 per cent in the index to close at 33,141.85. The depreciation recorded in the share prices of Nestle, Forte Oil, UBA, FBN Holdings and Dangote Cement was mainly responsible for the loss recorded in the Index

The total value of stocks traded on that day was N5.55 billion, down by 9.26 per cent from N6.11 billion recorded on Monday. The most actively traded sectors were: Financial Services (309.56 million share), Conglomerates (50.57 million shares) and Consumer Goods (21.60 million shares), while the three most actively traded stocks were: Zenith Bank (62.30 million shares), Transcorp (49.20 million shares) and FCMB (41.45 million shares).

However, after two days of slide, the market recorded a rebound and appreciated by 1.38 per cent to close at 33,598.20.

Gains in Nigerian Breweries, GTBank, UBA, FBN Holdings and Zenith Bank boasted the rebound. Investors recouped N157.8 billion as market capitalisation expanded to N11.6 trillion. Also, activity level improved as volume and value traded grew 85.0 per cent and 13.5 per cent to 759.0 million shares units and N6.3 billion respectively.

Performance across sectors was bullish as all indices appreciated. The NSE Banking Index led with 2.9 per cent on the back of gains in GTBank (+5.0 per cent) and Zenith Bank (+5.0 per cent) while appreciation in AXA Mansard (+3.3 per cent) and Continental Reinsurance Plc (+2.7 per cent) drove the NSE Insurance Index 1.5 per cent northwards. Similarly, the NSE Oil & Gas Index appreciated 1.3 per cent as a result of gains in Oando (+8.1 per cent) and Seplat (+1.2 per cent), just as the NSE Consumer Index appreciated by 1.0 per cent boosted by gain in Nigerian Breweries Plc. The NSE Industrial Goods Index rose 0.8 percent following gain by Lafarge Africa.

The market sustained the positive momentum for the second day on Thursday, lifting the index by 0.59 per cent. The positive performance resulted from sustained buying interest in blue-chip banking and consumer goods stocks. Specifically, the day’s performance was driven by gains in Zenith, Nigerian Breweries, GTBank, and Unilever.

However, contrary to the previous trading session, performance across sectors was mixed with three of the five indices closing in the green. The NSE Banking index gained the most, appreciating by 1.8 per cent on the back of gains in GTBank (+1.7 per cent) and Zenith Bank (+4.6 per cent) while price rally in AXA Mansard (+4.8 percent) lifted the NSE Insurance Index by 1.4 per cent.

Also, similarly, the NSE Consumer Goods Index appreciated 1.1 per cent following gains in Nigerian Breweries (+2.3 per cent). Conversely, the NSE Oil & Gas Index and the NSE Industrial Goods Index fell 1.1per cent apiece as investors booked profit in Mobil Oil, Seplat and Lafarge Africa.

The market ended the last day of the week with a marginal growth as the index grew by 0.04 per cent propelled by gains in Nigerian Breweries Plc, Nestle Nigeria Plc, Presco, Ecobank Transnational Incorporated and Zenith Bank Plc.

Market turnover

Meanwhile, investors exchanged 2.737 billion shares worth N32.042 billion in 32,217 deals last week, compared with 3.100 billion shares valued at N29.180 billion that exchanged hands the previous week. The Financial Services Industry remained the most traded, accounting for 2.189 billion shares valued at N21.792 billion traded in 18,832 deals, thus contributing 79.98 per cent and 68.01 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 287.945 million shares worth N621.772 million in 2,031deals. The third place was occupied by Consumer Goods Industry with a turnover of 114.832 million shares worth N5.370 billion in 5,040 deals.

Trading in the top three equities namely, Access Bank Plc, Zenith Bank Plc and Transnational Corporation of Nigeria Plc accounted for 918.046 million shares worth N10.324 billion in 5,809 deals, contributing 33.53 per cent and 32.22 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 16,300 units of Exchange Traded Products (ETPs) valued at N973,376.00 executed in three deals compared with a total of 40.317 million units valued at N178.841 million transacted in the preceding week in 12 deals.

Similarly, a total of 12,193 units of Federal Government Bonds valued at N12.440 million were traded last week in 14 deals, compared with a total of 10,860 units valued at N10.196 million transacted the previous week in 10 deals.

Price Gainers and Losers

A look at the price movement chart showed 38 stocks appreciated, while 42 others depreciated. May & Baker Nigeria Plc led the bulls, surging 60.5 per cent. Skye Bank Plc trailed with a gain of 41.5 per cent, while Cement Company of Northern Nigeria Plc chalked up 33.6 per cent.

Transcorp Plc garnered 22.3 per cent, just as Ashaka Cement Plc, Unilever Nigeria Plc and Okomu Oil Palm Plc appreciated by 21.2 per cent, 20.9 per cent and 15.7 per cent respectively. Presco Plc, Unity Bank Plc and Fidson Healthcare Plc added 15.7 per cent, 15.4 per cent and 15.3 per cent in that order.

On the downside, International Breweries Plc led the price losers with 19.1 per cent, followed by Forte Oil Plc with 13.5 per cent. Learn Africa Plc and Champion Breweries Plc shed 12.6 per cent and 8.5 per cent respectively. Custodian and Allied Plc went down by 8.4 per cent, just as Diamond Bank Plc and Mobil Oil Nigeria Plc depreciated by 7.6 per cent respectively.

Other top price losers were: Cutix Plc (7.4 per cent); Dangote Sugar Refinery Plc (7.1 per cent0 and N.E.M Insurance Plc (7.0 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

CBN to Extend Credit Risk Management System to OFIs

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In an effort to curb growing bad debt, the Central Bank of Nigeria has said it will extend its Credit Risk Management System to Other Financial Institutions (OFIs) operating in Nigeria to protect them from bad debtors.

According to the apex bank, this is important following the successful implementation of the credit risk system in other lending institutions operating in Nigeria.

The bank disclosed this in a circular titled ‘Credit Risk Management System: Commencement of enrolment of all Development Finance Institutions, Microfinance Banks, Primary Mortgage Banks and Finance Companies’ and signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, on Monday.

In part, the circular read, “As part of efforts to promote a safe and sound financial system in Nigeria, the CBN introduced the CRMS to improve credit risk management in commercial, merchant and non-interest banks as well as to prevent predatory borrowers from undermining the banking system.

“With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrolment of Other Financial Institutions on the CTMS platform.

“Accordingly, all DFIs, MfBs, PMBs and FCs are required to report all credit facilities (principal and interest) to the CRMs and to update same on monthly basis.

“OFIs shall note the Bank Verification Numbers and Tax Identification Numbers are the only basis for regulatory renditions”.

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Banking Sector

BoI Grows Assets by 78.8% to N1.86 Trillion

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The Bank of Industry Group concluded the 2020 financial year with a 78.8 per cent growth of assets from N1.04tn to N1.86tn between 2019 and 2020.

A statement by the bank on Monday said the increase was driven to a large extent by the successful debt syndication of €1bn and $1bn that were concluded in March and December 2020 respectively.

BoI stated that the group’s financial statement demonstrated resilience and strength, noting that the period had significant challenges in the operating environment on account of the impact of COVID-19 pandemic on the economy.

“It also indicates synergy with the various interventions developed by the Federal Government, the Central Bank as well as other strategic partners towards ameliorating the impact of the pandemic on Nigerian enterprises,” the statement said.

The group’s total equity increased by 14.8 per cent from N293.08bn in the previous year to N336.48bn in 2020.

It added that as a reflection of the adverse impact of the challenging operating environment on growth of new facilities, loans and advances grew marginally in 2020 by 1.3 per cent to N749.84bn from the 2019 position.

The bank explained that this was largely due to the economic slowdown in the year as well as the various interventions and support initiated by the bank for its customers.

“The bank reviewed and restructured all its managed projects under the CBN intervention programme with interest rate reduction from nine to five per cent per annum for a period of one year and moratorium extension of three months (with a possible extension up to 12 months),” it said.

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Banking Sector

TAJBank Deploys NQR Solution To Ease Customer Transactions

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TAJBank, Nigeria’s non-interest bank, has announced the deployment of the NQR Payment solution, an indigenous Quick Response Code (QRC) by the Nigeria Interbank Settlement Scheme (NIBSS), for merchants and customers as the newest addition to its innovative e-business channels.

The NQR Payment solution is a secure QR-code-based payments and collections platform developed for merchants and customers to receive and make payments for goods and services in a quick, easy, contactless and secure manner.

A statement signed by the Founder/Chief Operating Officer of the bank, Mr. Hamid Joda, indicated that the ingenious solution would further drive TAJBank’s culture of innovation and create a seamless payment experience for its rapidly growing individual and corporate customers in their banking transactions.

“We are excited to have this payment channel introduced into the nation’s financial system as an addition to other innovative solutions we have deployed over the past few months.

This is a proof that, as we have said in our communications signature line, TAJBank’s interest is always in our customers”, Joda enthused.

In his remarks, the non-interest lender’s Chief Marketing Officer/Co-Founder, Mr. Sherif Idi, also maintained that the deployment of the NQR payment solution would revolutionize the e-payment experience and open new frontiers for small, medium and large scale businesses who are major stakeholders of the bank.

Since it commenced operations in the non-interest banking segment of the financial services industry, TAJBank is noted for its impeccable track record of growth and innovation, rendering exceptional quality services to customers.

The lender’s NQR solution is open to all customers of the bank, both merchants and individuals, across all its branches and digital channels globally.

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