- Food Stocks Appreciate by 1.14%, Market Gains N23bn
Food/beverage stocks soared by 1.14 per cent on Wednesday, thus emerged the top-performing stocks as the Nigerian Stock Exchange capitalisation appreciated by N23bn.
The NSE sector performance showed that the banking and insurance indices also appreciated by 0.22 per cent and 0.46 per cent, respectively. The industrial goods and oil/gas sectors recorded declines of 0.39 per cent and 0.88 per cent, accordingly.
A total of 119.898 million shares worth N1.744bn were traded in 3,015 deals at the close of trading on the floor of the bourse.
The NSE capitalisation rose to N12.223tn from N12.2tn as the All-Share Index closed at 35,464.34 basis points from 35,397.52 basis points.
After closing down for the first two trading days in the week, the Nigerian equities market moved into the green zone as the NSE ASI advanced by 0.19 per cent to settle the year-to-date return at 31.96 per cent.
Volume of transactions and market turnover however declined by 67.90 per cent and 69.74 per cent apiece at the close of the day. Market breadth reflected 16 gainers and 21 losers.
NEM Insurance Company (Nigeria) Plc and Unilever Nigeria Plc topped the gainers’ chart, appreciating by 4.76 per cent apiece to close at N1.10 and N 44, respectively.
The stocks were closely followed by C & I Leasing Plc, Aiico Insurance Plc and Nestle Nigeria Plc, which appreciated by 4.55 per cent, 3.64 per cent and 3.46 per cent, respectively.
On the other hand, Presco Plc topped the losers’ list depreciating by 4.99 per cent to close at N60.80 at the end of trading activities.
This was followed by Oando Plc, Eterna Plc, May & Baker Nigeria Plc and Jaiz Bank Plc, which slid respectively by 4.89 per cent, 4.74 per cent, 4.29 per cent and 4.29 per cent.
“Mixed sentiments pervaded the market on Wednesday as bullish activities on certain market heavyweights offset the sell-offs witnessed on a number of tickers. We expect to see stronger positive momentum in the market as the week draws to a close,” analysts at Meristem Securities said in a post.
CBN Maintains 11.5 Percent Monetary Policy Rate, Leaves Other Ratios Unchanged
The Central Bank of Nigeria led Monetary Policy Committee (MPC) has left the interest rate unchanged at 11.5 percent to further stimulate activities in the real sector of the economy.
Godwin Emefiele, the Governor of Central Bank of Nigeria disclosed this at the end of the MPC meeting on Tuesday in Abuja.
He said other parameters, the Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor, were left unchanged.
According to the Governor, the committee voted unanimously to maintain the current monetary policy and attributed the surge in inflation to structural policies, the increase in pump price and the recent #EndSARS protest.
Highlights of CBN-MPC’s Decision
- MPR was kept at 11.50%
- The asymmetric corridor of +100/-700 basis points around the MPR
- CRR was retained at 27.5%
- Liquid Ratio was also kept at 30%
Unity Bank Grew Gross Earnings by 8 Percent to N34 Billion in Nine Months
Unity Bank Plc grew gross earnings by 8 percent despite COVID-19 and other headwinds that hurt the profitability of most businesses in the first nine months of the year.
A break down of the bank’s unaudited financial results for the period showed gross earnings rose by 8 percent to N33.91 billion for the nine months ended September 30, 2020, up from N31.26 billion posted in the same period of last year.
The lender’s total assets rose by 44 percent from N293.05 billion in the corresponding period of 2019 to N420.87 billion in the period under review.
Unity Bank grew profit before tax from N1.61 billion in 2019 to N1.71 billion in the period under review, while profit after tax expanded from N1.48 billion in the corresponding period to N1.57 billion in 2020.
Customers’ deposits stood at N332.36 billion during the period under review, up from N257.69 billion posted in 2019.
Commenting on the performance, Mrs. Tomi Somefun, the Managing Director/Chief Executive Officer, Unity Bank Plc, expressed delight at the strong growth recorded across the bank’s balance sheet, especially from both the liability and assets side of the business and across key indices.
She said, “even as the bank continues to innovate in its e-business product bouquet to target and support value chain business with robust technology and thus diversify its earnings base.”
Somefun said, “One of the areas that will define our strategic direction going forward is investment in alternative channels, leveraging further deployment of resources in technology.
“COVID-19 gave us a chance to test the integrity and scalability of our technology, the IT infrastructure, and the electronic banking channels, and provided us an opportunity to see where we needed to improve and strengthen, knowing that the future of sustainable banking business is in alternative channels.”
Financial Sector Grew by 6.8 Percent in the Third Quarter
The finance and insurance sector that comprises of both the financial institutions and insurance subsectors grew by 5.91 percent year-on-year in nominal terms in the third quarter (Q3).
According to the National Bureau of Statistics (NBS) latest report, the financial institutions’ subsector accounted for 88.89 percent of the sector in real terms in the quarter under review while the insurance subsector contributed the remaining 11.11 percent.
During the third quarter of 2020, the financial institutions’ subsector grew by 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019 despite COVID-19 and a tough operating environment. The insurance subsector, however, contracted by -18.67 percent in Q3 2020 from -29.53 percent in Q2 2020 and 3.96 percent in Q3 2019.
On a quarterly basis, the sector declined by 24.76 percent.
In terms of contribution to GDP, the finance and insurance sector contributed 2.46 percent in Q3 2020, higher than the 2.40 percent it represented a year ago and lower than the contribution of 3.76 percent achieved in the previous quarter.
The economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria is officially in the second economic recession in four years.
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