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Profit-taking Hits Stock Market, Investors Lose N121.5bn

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Nigerian Exchange Limited - Investors King
  • Profit-taking Hits Stock Market, Investors Lose N121.5bn

The Nigerian stock market closed in losses on Wednesday resulting in equities investors losing N121.5bn.

The market shrank for the third consecutive trading day as the All-Share Index shed 0.77 per cent to settle at 43,538.16 points while year-to-date return further moderated to 13.8 per cent.

Having shed N121.5bn, the Nigerian Stock Exchange market capitalisation settled at N15.6tn.

The negative close could be largely attributed to sell pressure across board with Dangote Cement Plc, Nigerian Breweries Plc and Stanbic IBTC Holdings Plc losing 2.2 per cent, two per cent and 3.5 per cent, respectively.

Activity level softened as volume and value traded declined by 29.1 per cent and 6.9 per cent to 508.3 million units and N4.5bn, respectively.

Performance across sectors was largely bearish as all indices closed in the red save the banking index which appreciated by 0.6 per cent following gains in Zenith Bank Plc and United Bank for Africa Plc, which dropped accordingly by 2.6 per cent and 1.2 per cent.

The industrial goods index led losers, as losses in Dangote Cement dragged the index 1.1 per cent lower.

In the same vein, the insurance and oil/gas indices lost 0.8 per cent apiece, following price depreciation in Aiico Insurance Plc, NEM Insurance Plc, 11 Plc and Total Nigeria Plc, which depreciated respectively by 4.5 per cent, 3.2 per cent, five per cent and 0.4 per cent.

Similarly, the consumer goods index slid by 0.3 per cent as Flour Mills Nigeria Plc and Dangote Flour Plc declined by 0.6 per cent apiece.

Investor sentiment strengthened compared to the previous session as 18 stocks advanced against 40 decliners.

The top performing stocks were Caverton Offshore Support Group Plc, Linkage Assurance Plc and Lasaco Assurance Plc , which appreciated by 9.7 per cent, 6.8 per cent and 5.9 per cent, respectively.

On the other hand, UNIC Diversified Holdings Plc, Skye Bank Plc and Wema Bank Plc emerged the worst performers, depreciating accordingly by 9.5 per cent, 8.9 per cent and 8.8 per cent.

“Against the backdrop of sustained profit-taking since the start of the week, we expect performance in subsequent trading sessions to remain negative. However, in light of lower pricing on fundamentally sound stocks we also anticipate more activity in the coming week as investors seek bargain opportunities,” analysts at Afrivest Securities said in a post.

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

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Banking Sector

Fidelity Bank Launches N127.1bn Public Offer and Rights Issue on June 20

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Fidelity Bank Plc, Nigeria’s sixth-largest bank, is set to open its public offer and rights issue to investors on Thursday, June 20, 2024.

In preparation for this significant financial event, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Group (NGX) on the same day.

This presentation is expected to provide detailed insights into the bank’s strategy and the opportunities presented by the public offer and rights issue.

Under the rights issue, Fidelity Bank will offer 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. These shares will be available to existing shareholders in the proportion of 1 new ordinary share for every 10 ordinary shares held as of January 5, 2024.

In addition to the rights issue, the bank will also offer 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share. This dual approach is part of the bank’s comprehensive strategy to raise a total of up to N127.1 billion.

The acceptance and application period for the rights issue and public offer will commence on Thursday, June 20, and close on Monday, July 29, 2024.

This timeline provides investors ample opportunity to participate in the bank’s capital expansion.

Fidelity Bank has engaged Stanbic IBTC Capital as the lead issuing house for the combined offer. The joint issuing houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited, and Planet Capital Limited.

These firms will play a crucial role in managing the offer and ensuring its success.

The bank’s initiative to raise N127.1 billion is seen as a strategic move to bolster its capital base and ensure compliance with the CBN’s revised capital requirements, which were introduced on March 28, 2024.

This capital raise is expected to enhance the bank’s capacity to support its growing customer base and expand its operations across Nigeria and beyond.

In recent years, Fidelity Bank has demonstrated robust financial performance and growth, positioning itself as a key player in Nigeria’s banking sector.

The successful completion of this public offer and rights issue will further solidify its standing and enable it to pursue new opportunities in the competitive financial landscape.

Investors and stakeholders are keenly anticipating the outcome of this capital-raising exercise, which is poised to mark a significant milestone in Fidelity Bank’s journey toward sustained growth and stability.

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Banking Sector

Fidelity Bank Plc Promotes 11% of Staff Following Record Financial Performance

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Leading financial institution, Fidelity Bank Plc has announced the promotion of 11% of its workforce, a testament to the exceptional performance and dedication of its employees.

This significant move follows the release of the bank’s 2023 full year Audited Financial Statements, which reported an impressive 131.5 percent growth in Profit Before Tax (PBT) to N124.26 billion.

The recent promotions span every level within the bank, reflecting Fidelity Bank Plc’s commitment to recognizing and rewarding excellence across its entire organization.

This strategic initiative has garnered positive reactions from staff members, who see it as a validation of their hard work and contribution to the bank’s remarkable financial achievements.

In addition to the promotions, Fidelity Bank Plc has also concluded arrangements to raise a total of N127.1 billion through a Rights Issue to existing shareholders and a Public Offer. This move is part of the bank’s broader strategy to strengthen its capital base, support future growth, and enhance shareholder value.

Fidelity Bank Plc’s impressive financial performance and the subsequent employee promotions highlight the bank’s robust operational strategy and its commitment to fostering a rewarding work environment. By investing in its people and ensuring their career growth, the bank continues to build a motivated and high-performing workforce.

Ranked as one of the best banks in Nigeria, Fidelity Bank Plc is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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Finance

Nigeria to Receive $2.25 Billion from World Bank for Economic Growth

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The World Bank has approved a $2.25 billion funding package aimed at stabilizing the economy and assisting the most vulnerable segments of the population.

The Washington-based lender announced this approval on Thursday.

The fresh infusion of capital is designed to bolster Nigeria’s efforts to stabilize its economy, which has been plagued by years of foreign-exchange shortages and economic instability.

The funding will also focus on enhancing non-oil revenue streams and safeguarding oil revenues to ensure fiscal sustainability.

This, in turn, will help deliver quality public services and support the poor and economically at-risk communities.

Ousmane Diagana, the World Bank’s Vice President for Western and Central Africa, emphasized the importance of this financing package.

“Nigeria’s concerted efforts to implement far-reaching macro-fiscal reforms place it on a new path which can stabilize its economy and lift its people out of poverty,” Diagana said.

“This financing package reinforces the World Bank’s strong partnership with Nigeria, and our support towards reinvigorating its economy and fast-tracking poverty reduction, which can serve as a beacon for Africa.”

Since assuming office in May 2023, President Bola Tinubu has initiated a series of reforms aimed at addressing the chronic foreign-exchange shortages and stimulating economic growth.

Key measures include allowing the naira to trade more freely, significantly increasing interest rates, and phasing out a costly fuel subsidy by adjusting gasoline prices.

Also, the Central Bank has taken steps to clear a $7 billion backlog of unmet foreign-exchange obligations to industries and foreign investors.

These reforms are part of a broader strategy to attract foreign investment and diversify the economy, which has traditionally relied heavily on oil production.

Despite Nigeria’s status as Africa’s largest oil producer, low crude production levels and a lack of economic diversification have contributed to ongoing fiscal challenges and foreign-exchange shortages.

The World Bank’s funding is expected to provide much-needed support for these reform efforts, helping to stabilize the economy and improve the overall economic outlook.

The injection of $2.25 billion will not only address immediate fiscal needs but also lay the groundwork for sustainable economic growth and poverty reduction.

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