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Equities Market Gains N810bn to Hit N11.945tn on 13-day Rally

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  • Equities Market Gains N810bn to Hit N11.945tn on 13-day Rally

The Nigerian equities gained N810 billion in capitalisation following a bull run for 13 trading days. The renewed demand for equities on the Nigerian bourse lifted the market capitalisation from N11.133trillion on July 5, to N11.945 trillion on Monday, July 24, 2017.

Although the return of more foreign portfolio investors due to the introduction of a new foreign exchange window by the Central Bank of Nigeria (CBN) in April had influenced the return of the bulls to the market, expectations that companies would release improved corporate results for the first half (H1) of the year helped to sustain the momentum.

The development made the market to appreciate for 13 consecutive trading days, leading to a gain of N810 billion or 7.3 per cent. The Nigerian Stock Exchange (NSE) All-Share Index rose by same margin from 32,302.32 to close at 34,652.52. The market appreciated every trading day from July 6 to Monday, July 24.

Market analysts said investors have been taking position ahead of H1 corporate announcements. The results so far released showed improved performance compared to the previous year.

For instance, Unilever Nigeria posted a revenue of N45.105 billion in H1 of 2017, up 39 per cent from N32.278 billion in the corresponding period of 2016. Cost of sales was up at N32.197 billion in 2017. Sales and distribution expenses also went up from N1.502 billion to N1.942 billion in 2016.

However, marketing and administrative expenses reduced from N6.689 billion to N5.571 billion. Unilever ended the period with profit before tax (PBT) of N5.044 billion, compared with N1.487 billion in 2016, showing a growth of 239 per cent, while profit after tax (PAT) stood at N3.676 billion, up by 236 per cent from N1.093 billion in 2016.

Lafarge Africa posted N154.8 billion, indicating an increase of 44.2 per cent from N107.3 billion in 2016. Cost of sale grew by 19.7 per cent from N92.2 billion to N110 billion, while sales and marketing expenses followed same uptrend to hit N2.12 billion, from N1.98 billion. Administrative expenses rose from N10.23 billion to N16.3 billion.

Technical fees soared by 202 per cent from N1.584 billion in 2016 to N4.798 billion in 2017. But the company ended the H1 with PBT of N18.2 billion, compared a loss of N30.2 billion in 2016, while PAT stood at N19.7 billion.

Also, Transnational Corporation of Nigeria Plc, which released its results on Monday, recorded PAT of N4.164 billion recorded in H1 of 2017, compared with a loss of N12.191 billion posted in the corresponding period of 2016.

Specifically, Transcorp Plc recorded revenue of N32.174 billion in 2017, up from N24.779 billion in 2016. Cost of sale stood at N19.3 billion, as against N13.3 billion in 2016, while administrative expenses rose to N5.663 billion, compared with N5.265 billion in 2016. Net finance cost fell from N17.268 billion in 2016 to N4.988 billion in 2017. Consequently, Transcorp ended H1 2017 with PAT of N4.164 billion, a recovery from a loss of N12.191 billion in 2016.

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

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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