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Equities Market: N3trn Gain Boosts Full Recovery Prospects



asian stocks
  • Equities Market: N3trn Gain Boosts Full Recovery Prospects

Stakeholders in the Nigerian capital market are now more optimistic that about its recovery at the end of the year as the equities market has gained N3.094 trillion in seven months. Having recorded a decline for three consecutive years to 2016, expectations are high that the market would recover in 2017.

Although the market started the year with fall in January and February, it closed in green in March rising by 0.74 per cent. That positive trend has been sustained culminating in a gain of N3.094 trillion in capitalisation as at the end of July on Monday.

Specifically, the market capitalisation ended at N12.35 trillion, up from N9.265 trillion at the beginning of the year, translating to a growth of 33.3 per cent.

Similarly, the Nigerian Stock Exchange (NSE) All-Share Index rose by same margin of 33.3 per cent from 26,874.62 to close at 35,844 on Monday.

The Chief Executive Officer of the NSE, Mr. Oscar Onyema, some operators and market analysts had expressed optimism that investors should expect a positive performance this year.

According to him, the capital market is a subsector of the Nigerian economy and since it had been projected that the economy would recover from its recession and record a growth this year, the stock market should also recover.

After recording a decline in January and February, the make entered a bullish mode in March rising by 0.74 per cent. It consolidated with an appreciation of 0.95 per cent in April. The market took a major leap in May, jumping by 15 per cent as the new foreign exchange window for importers and exporters introduced by the Central Bank of Nigeria (CBN) attracted more foreign investors. The return of the foreign investors triggered interest among domestic investors, a development that led to sustained bull run that led to a growth of 12 per cent each in June and July. Consequently, the market gained over N3 trillion in seven months.

In fact, the market had rallied almost three months high last Thursday when the capitalisation hit a new high of N12.84 trillion, while index settled at 37,245.17 before profit taking set in last Friday and Monday.

Within the last six months, the level of foreign portfolio investments (FPIs) rose by 59.8 per cent to N430 billion, up from N269.22 billion invested in the corresponding period of 2016, according to data released by the NSE.

Similarly, domestic investors increased their level of investments to N505.03 billion in 2017, up by 42.19 per cent compared to N355.19 billion in 2016.

In all, total transactions at the nation’s bourse in H1 of 2017, increased by 47.7 per cent to N935 billion, from N624 billion in 2016. However, domestic investors outperformed foreign investors by 7.82 per cent in the month of May. While total domestic transactions increased by 7.53 per cent from N110.42 billion recorded in May 2017to N118.74billion in June2017, FPIs also increased by 6.66 per cent from N95.19 billion to N101.53billion within the same period.

But a further analysis of the domestic participation showed that the institutional composition of the domestic market decreased by 17.09pe cent from N67.95 billion recorded in May to N56.34billion in June 2017.

However, the retail composition increased by 46.92 per cent from N42.47 billion to N62.40billion within the same period.

According to NSE, this indicates a higher participation by retail investors over their institutional counterparts for the first time this year.

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

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ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs



ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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United Capital Plc Reports Stellar Growth with 65% Profit Increase, Announces Dividends



United Capital - Investors King

United Capital Plc (NGX: UCAP) has unveiled its unaudited financial results for the period ending June 30, 2024.

The company reported a 38% increase in gross earnings year-on-year to N15.15 billion. Profit before tax soared by 63% to N9.06 billion while profit after tax surged by 65% to N7.74 billion.

Total assets rose by 27% in the first half to N1.19 trillion, and shareholders’ funds increased by 33% to N120.34 billion.

These robust results have prompted United Capital to declare an interim dividend of N0.90 per 50 kobo ordinary share, alongside a generous bonus share offering of “2 for 1.”

Peter Ashade, Group CEO, expressed satisfaction with the strong financial outcomes, highlighting the company’s commitment to creating wealth and delivering superior value to shareholders.

“This marks a historic moment with our first-ever interim dividend and bonus share announcement, demonstrating our dedication to stakeholder value,” Ashade stated.

The company remains confident about sustaining its growth trajectory throughout 2024, bolstered by nearly N1.3 trillion in funds under management.

United Capital continues to prioritize activities that enhance and preserve value for stakeholders, maintaining its competitive edge and profitability.

With a focus on trusts, mutual funds, and professionally managed investments, the group is strategically positioned to achieve its growth objectives, ensuring sustainable returns for all involved.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits



Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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