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Investors Sell Off Shares After Yuletide Celebration

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NSE
  • Investors Sell Off Shares After Yuletide Celebration

As businesses opened on Wednesday after the Yuletide holiday on Monday and Tuesday, investors in the Nigerian equities market started the week on a negative note as share sell-offs characterised trading.

The Nigeria Stock Exchange market capitalisation dropped by N225bn to close at N13.483tn from N13.708tn recorded on Friday.

A total of 425.959 million shares worth N2.121bn exchanged hands in 2,937 deals.

The equities market recorded a 1.6 per cent decline at the end of trading on Wednesday to buck a three-day gaining streak; thus, paring the benchmark index year-to-date return to 41 per cent.

Dangote Cement Plc was the major drag to performance after it shed 3.9 per cent; although selling pressure were also observed in large-cap stocks within the consumer goods, banking and agriculture sectors. However, activity level waxed stronger as volume and value rose by 103.9 per cent and 37.9 per cent to N416.9bn and N2.1bn, respectively.

Sector performance was mixed as three of the five major NSE indices closed in the red. The industrial goods index led the losers chart, plunging by 2.6 per cent on account of sell-offs in Dangote Cement while the consumer goods index trailed, closing 1.2 per cent lower, following price depreciation in Nigerian Breweries Plc, which declined by 4.3 per cent.

Similarly, the banking index lost 0.3 per cent — pressured by Ecobank Transnational Incorporated and United Bank for Africa Plc, which shed 2.8 per cent and 0.8 per cent, accordingly.

On the other hand, the insurance index closed one per cent higher as investors positioned in NEM Insurance Nigeria Plc and Axa Mansard Insurance Plc, which gained four per cent and 0.5 per cent, accordingly, while the oil/gas index gained 0.5 per cent, solely on account of Mobil Nigeria Plc, which appreciated by 4.9 per cent.

Investor sentiment weakened as indicated by market breadth which retreated as 14 stocks gained while 23 declined.

Cadbury Nigeria Plc, Mobil Nigeria Plc and Fidelity Bank Plc topped the gainers’ chart, appreciating by 9.9 per cent, 4.9 per cent and 4.6 per cent, respectively while Okomu Oil Palm Plc, Presco Plc and Nigerian Breweries led the losers’ chart, sliding by five per cent, 4.9 per cent and 4.3 per cent, respectively.

“Given the significant rise in oil prices in recent times and the broadly bullish outlook for commodity prices for 2018, we maintain our positive short — to medium-term perspective for equities,” analysts at Afrinvest Securities said in a draft.

In the Treasury bonds space, the average yield declined marginally by 0.009 per cent to close at 14.06 per cent. Yield advancements were recorded on two tenors as yields on five tenors declined while all others traded flat.

Bullish investor sentiment also prevailed in the Treasury bills space, as the average T-Bills yield declined by 0.44 per cent to settle at 13.86 per cent. Yield declines were recorded on the one-month, three-month and six-month tenors, while the nine-month and 12-month tenors recorded respective yield advancements of 0.39 per cent and 0.57 per cent.

The average money market rate shed 0.63 per cent to settle at 5.38 per cent as the open buy-back and overnight rates declined by 0.67 per cent and 0.58 per cent, respectively.

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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