Finance

Equities Close Lower Despite Halting Seven-day Losing Streak

Published

6 years ago

February 19, 2018

Nigerian Exchange Limited - Investors King

Equities Close Lower Despite Halting Seven-day Losing Streak

The Nigerian equities market recorded its second consecutive week of decline as the Nigerian Stock Exchange (NSE) All-Share Index fell 1.13 per cent to close at 42,638.83. Similarly, market capitalisation ended lower at N15.302 trillion.

Despite rebounding from a seven-day losing streak on Wednesday, the market closed the week on a negative note as losses recorded in the first two days outweighed the gains of three days.

As a result, the NSE ASI fell by 1.13 per cent to further reduce the year-to-date growth of the market to 11.5 per cent. Apart from the ASI that decline , all other indices finished lower with the exception of the NSE Pension Index that appreciated by 0.08 per cent while the NSE ASeM Index closed flat.

Analysts at Cordros Capital Limited said: “Given two consecutive weeks of profit taking, we expect investors to hunt bargains while also taking position ahead of Q4-17 corporate earnings releases.”

Daily Performance

Still in the bearish mood, the market opened on with a decline of 0.9 per cent on the first day of the week to close at 42,737.89. Similarly, the market capitalisation fell by same margin to close at N15.34 trillion.

The depreciation recorded in the share prices of GTBank, FBN Holdings, Zenith Bank, Dangote Sugar, and Transcorp were mainly responsible for the decline recorded.

According analysts at FSDH Research, the on-going sell sentiment may continue till midweek albeit on a milder scale than in the previous trading sessions

“Profit taking and bargain hunting may likely characterise subsequent trading sessions,” they added.

In all, 36 stocks depreciated, while only 13 appreciated. Eternal Plc led the price losers with 9.6 per cent, trailed by Equity Assurance Plc with 8.3 per cent. AIICO Insurance Plc shed 8.2 per cent, while Consolidated Hallmark Insurance Plc lost 5.7 per cent.

FBN Holdings Plc, GTBank Plc and Multiverse depreciated by 5.0 per cent apiece. May & Baker Nigeria Plc and Fidelity Bank Plc shed 4.9 per cent each.

On the positive side, PZ Cussons Nigeria Plc led the price gainers with 5.8 per cent, trailed by Beta Glass Plc, Glaxosmithkline Consumer Nigeria Plc and Unity Bank Plc with 4.9 per cent apiece.

UAC of Nigeria Plc chalked up 4.1 per cent, just as Jaiz Bank Plc, Linkage Assurance Plc garnered 3.8 per cent and 3.5 per cent respectively. C & I Leasing Plc, ABC Transport Plc and Wema Bank Plc advanced by 2.7 per cent, 2.5 per cent and 2.3 per cent in that order.

All the sectoral indices trended southwards. They were led by the NSE Banking Index , shedding 3.8 per cent following losses in bellwether banking stocks – GTBank (-5.0 per cent) and Zenith Bank (-4.9 per cent). The NSE Insurance Index followed with 1.1 per cent slide while the NSE Consumer Goods Index closed 0.9 per cent lower due to downtick in Nigerian Breweries Plc (-2.9 per cent) and Dangote Sugar Refinery Plc (-4.8 per cent). The NSE Industrial Goods Index and NSE Oil & Gas Index shed 0.4 per cent and 0.2 per cent respectively.

The market recorded its highest decline on Tuesday with capitalisation falling to a new low of N14.97 trillion, while the index closed below the 42,000 threshold at 41,708.15.

Specifically, the index fell 2.41 per cent, the highest decline since the beginning of the year. Similarly, the market capitalisation shed N369.5 billion, propelled by a decline in the shares of bellwether such as Dangote Cement, UBA, Nestle Nigeria Plc, FBN Holdings, and Nigerian Breweries Plc.

The bears were virtually on rampage as 40 stocks depreciated compared with 15 stocks that appreciated. Prestige Assurance Plc led the price losers with 7.1 per cent, followed by Skye Bank Plc with a decline of 6.5 per cent. Consolidated Hallmark Insurance Plc, FCMB Group Plc and United Bank for Africa Plc went down by 6.1 per cent, 5.9 per cent and 5.5 per cent in that order.

Japaul Oil and Maritime Services Plc, Royal Exchange Plc and Union Bank of Nigeria Plc shed 5.0 per cent each. Forte Oil Plc declined by 4.9 per cent, just as Fidson Healthcare Plc, Dangote Cement Plc and Sterling Bank Plc lost 4.8 per cent apiece.

The stocks that escaped the bear run were led by A.G Leventis Nigeria Plc with 7.0 per cent, trailed by Berger Nigeria Plc with 5.0 per cent, just as Etarna Plc appreciated by 4.9 per cent.

Other top price gainers included: NAHCO Plc (4.8 per cent); Linkage Assurance Plc (4.5 per cent); Access Bank Plc (3.9 per cent); African Prudential Plc (3.8 per cent); May & Baker Nigeria Plc(3.3 per cent).

However, the equities market rebounded on Wednesday after a seven-day losing streak. Bargain hunting in banking and consumer goods sectors lifted the index by 1.1 per cent to close at 42,171.80 while market capitalisation added N166.4 billion to close at N15.1 trillion.

The rebound could largely be attributed to buying interest in Banking and Consumer counters with Zenith Bank (+5.0 per cent), United Bank for Africa (+6.3 per cent ) and Nestle (+1.9 per cent) weighing the most on performance.

But Skye Bank Plc led the gainers chart with 10 per cent trailed by FCMB Group Plc that garnered 9.8 per cent. Conversely, First Aluminum led the price losers with 9.1 per cent, trailed by LASACO Assurance Plc with a decline of 5.8 per cent.

Volume and value of trading also rose by 10.7 per cent and 28.1 per cent to 520.7 million shares and N4.7 billion respectively.

Commenting on the performance, analysts at Cordros Capital Limited said: “We expect appetite to remain strong, as investors continue to hunt bargains and take position ahead of Q4-17 earnings, amidst generally improving macroeconomic conditions.”

Also commenting, analysts at Meristem Securities Limited said: “The bullish charge in the market was led by gains recorded on counters in the banking and consumer goods sectors, which offset the loss on the market’s heavyweight, Dangote Cement Plc. We expect a continuation of the bargain hunting activities in the market and an improvement in the market mood to sustain the recovery in the near term.”

The market sustained the positive performance on Thursday with the index rising by 1.0 per cent to 42,604.40 , while market capitalisation added N155.2 billion to close at N15.3 trillion. The performance was majorly driven by price appreciation in FBN Holdings Plc (+8.2 per cent), GTBank (+2.0 per cent) and Dangote Cement Plc (+0.6 per cent).

Sectorally, it was largely bullish as four of five indices closed in the green while one closed flat. The NSE Banking Index led gainers, rising 1.3 per cent. The NSE Industrial and NSE Consumer Goods indices trailed, rising 0.9 per cent and 0.8 per cent respectively. The NSE Oil & Gas Index appreciated marginally by 0.01 per cent, while the NSE Insurance Index however closed the day flat.

Market Turnover

Meanwhile, a total turnover of 2.940 billion shares worth N27.924 billion was recorded in 28,570 deals during the review week, compared with a total of 4.426 billion shares valued at N24.236 billion that exchanged hands in 29,573 deals the previous week.

The Financial Services Industry led the activity chart with 2.174 billion shares valued at N17.033 billion traded in 19,013 deals, thus contributing 73.96 per cent and 61 per cent to the total equity turnover volume and value respectively. The Services Industry followed with 232.482 million shares worth N216.990 million in 734 deals.

The third place was occupied by Conglomerates Industry with a turnover of 170.422 million shares worth N499.400 million in 1,578 deals. Trading in the top three equities namely – Linkage Assurance Plc, Skye Bank Plc and FCMB Group Plc accounted for 809.798 million shares worth N1.130 billion in 2,551 deals, contributing 27.5 per cent and 4.04 per cent to the total equity turnover volume and value respectively.

Price Gainers and Losers

A look at the price movement chat showed that 48) equities depreciated in price, lower than 64 equities of the previous week, while 30 equities appreciated in price during the week, higher than 23 equities recorded in the preceding week.

Consolidated Hallmark Insurance Plc led the price losers with 22.8 per cent, trailed by First Aluminium Nigeria Plc with 19.5 per cent.

Courtville Business Solutions Plc shed 17.3 per cent, just as Japaul Oil & Maritime Services Plc and Prestige Assurance Plc went down by 14.2 apiece.

Other top price losers included: Unity Kapital Assurance Plc (13.6 per cent); Multiverse Mining and Exploration Plc (12.5 per cent); Equity Assurance Plc (12.5 per cent); Caverton Offshore Support Group Plc (11.6 per cent);and Sterling Bank Plc (11.4 per cent).

Berger Paints Nigeria Plc led the price gainers with 11.4 per cent, followed by Beta Glass Plc with 10.2 per cent. Access Bank Plc appreciated by 5.4 per cent, just as A.G Leventis Nigeria Plc and GSK Nigeria Plc chalked up 5.2 per cent and 4.9 per cent in that order.

Top price gainers include: Transcorp Hotels Plc (4.8 per cent); WAPIC Insurance Plc (4.6 per cent); African Prudential Plc, PZ Cussons Nigeria Plc (4.1 per cent); and Zenith Bank Plc (3.5 per cent).

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Samed Olukoya

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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Loans

Akinwumi Adesina Calls for Debt Transparency to Safeguard African Economic Growth

Published

3 days ago

April 25, 2024

Samed Olukoya

Amidst the backdrop of mounting concerns over Africa’s ballooning external debt, Akinwumi Adesina, the President of the African Development Bank (AfDB), has emphatically called for greater debt transparency to protect the continent’s economic growth trajectory.

In his address at the Semafor Africa Summit, held alongside the International Monetary Fund and World Bank 2024 Spring Meetings, Adesina highlighted the detrimental impact of non-transparent resource-backed loans on African economies.

He stressed that such loans not only complicate debt resolution but also jeopardize countries’ future growth prospects.

Adesina explained the urgent need for accountability and transparency in debt management, citing the continent’s debt burden of $824 billion as of 2021.

With countries dedicating a significant portion of their GDP to servicing these obligations, Adesina warned that the current trajectory could hinder Africa’s development efforts.

One of the key concerns raised by Adesina was the shift from concessional financing to more expensive and short-term commercial debt, particularly Eurobonds, which now constitute a substantial portion of Africa’s total debt.

He criticized the prevailing ‘Africa premium’ that raises borrowing costs for African countries despite their lower default rates compared to other regions.

Adesina called for a paradigm shift in the perception of risk associated with African investments, advocating for a more nuanced approach that reflects the continent’s economic potential.

He stated the importance of an orderly and predictable debt resolution framework, called for the expedited implementation of the G20 Common Framework.

The AfDB President also outlined various initiatives and instruments employed by the bank to mitigate risks and attract institutional investors, including partial credit guarantees and synthetic securitization.

He expressed optimism about Africa’s renewable energy sector and highlighted the Africa Investment Forum as a catalyst for large-scale investments in critical sectors.

Banking Sector

UBA, Access Holdings, and FBN Holdings Lead Nigerian Banks in Electronic Banking Revenue

Published

4 days ago

April 24, 2024

Samed Olukoya

United Bank for Africa (UBA) Plc, Access Holdings Plc, and FBN Holdings Plc have emerged as frontrunners in electronic banking revenue among the country’s top financial institutions.

Data revealed that these banks led the pack in income from electronic banking services throughout the 2023 fiscal year.

UBA reported the highest electronic banking income of N125.5 billion in 2023, up from N78.9 billion recorded in the previous year.

Similarly, Access Holdings grew electronic banking revenue from N59.6 billion in the previous year to N101.6 billion in the year under review.

FBN Holdings also experienced an increase in electronic banking revenue from N55 billion in 2022 to N66 billion.

The rise in electronic banking revenue underscores the pivotal role played by these banks in facilitating digital financial transactions across Nigeria.

As the nation embraces digitalization and transitions towards cashless transactions, these banks have capitalized on the growing demand for electronic banking services.

Tesleemah Lateef, a bank analyst at Cordros Securities Limited, attributed the increase in electronic banking income to the surge in online transactions driven by the cashless policy implemented in the first quarter of 2023.

The policy incentivized individuals and businesses to conduct more transactions through digital channels, resulting in a substantial uptick in electronic banking revenue.

Furthermore, the combined revenue from electronic banking among the top 10 Nigerian banks surged to N427 billion from N309 billion, reflecting the industry’s robust growth trajectory in digital financial services.

The impressive performance of UBA, Access Holdings, and FBN Holdings underscores their strategic focus on leveraging technology to enhance customer experience and drive financial inclusion.

By investing in digital payment infrastructure and promoting digital payments among their customers, these banks have cemented their position as industry leaders in the rapidly evolving landscape of electronic banking in Nigeria.

As the Central Bank of Nigeria continues to promote digital payments and reduce the country’s dependence on cash, banks are poised to further capitalize on the opportunities presented by the digital economy.

Loans

Nigeria’s $2.25 Billion Loan Request to Receive Final Approval from World Bank in June

Published

5 days ago

April 23, 2024

Samed Olukoya

Nigeria’s $2.25 billion loan request is expected to receive final approval from the World Bank in June.

The loan, consisting of $1.5 billion in Development Policy Financing and $750 million in Programme-for-Results Financing, aims to bolster Nigeria’s developmental efforts.

Finance Minister Wale Edun hailed the loan as a “free lunch,” highlighting its favorable terms, including a 40-year term, 10 years of moratorium, and a 1% interest rate.

Edun highlighted the loan’s quasi-grant nature, providing substantial financial support to Nigeria’s economic endeavors.

While the loan request awaits formal approval in June, Edun revealed that the World Bank’s board of directors had already greenlit the credit, currently undergoing processing.

The loan signifies a vote of confidence in Nigeria’s economic resilience and strategic response to global challenges, as showcased during the recent Spring Meetings.

Nigeria’s delegation, led by Edun, underscored the nation’s commitment to addressing economic obstacles and leveraging international partnerships for sustainable development.

With the impending approval of the $2.25 billion loan, Nigeria looks poised to embark on transformative initiatives, buoyed by crucial financial backing from the World Bank.