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Investors Invest N39bn in Equities on Positive Sentiments

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Asian equities
  • Investors Invest N39bn in Equities on Positive Sentiments

Renewed investors’ confidence in equities boosted the value of trading by 79.7 per cent to N39.087 billion last week up from N21.740 billion the previous week. The amount was invested in 2.170 billion shares in 24,657 deals, compared with 2.018 billion shares exchanged in 25,496 deals the previous week.

The renewed demand for stocks also made the market to close the week on a positive note with the Nigerian Stock Exchange (NSE) All-Share Index rising by 0.72 per cent to be at 42,876.23. Similarly, market capitalisation rose by 0.82 per cent to close at N15.403 trillion. The growth is an improvement on the decline of 0.16 per cent recorded the previous week.

All other indices finished higher during the week with the exception of the NSE ASeM, NSE Banking and NSE Pension Indices that depreciated by 1.14 per cent , 0.59 per cent and 0.09 per cent in that order.

Commenting on the week-on-week performance, analysts at FSDH Merchant Bank said the market recorded a marginal increase to close positive.

“Activity level was positive in volume and value terms while market breath closed negative. Bargain hunting is likely to be sustained in coming sessions as market outlook remains positive in the immediate term,” they said.

Daily Performance

The market began the week with high hopes as it recorded a growth. The NSE Index rose marginally by 0.02 per cent to close at 42,579.48, lifted by the appreciation recorded in the share prices of GTBank, Zenith Bank, UAC of Nigeria Plc, PZ Cussons, and FCMB Group Plc among others.

Commenting on the market, analysts said it traded sideways in today’s session but recorded a marginal gain.

“The market sentiments to the corporate earnings of Total Nigeria, African Prudential and United Capital released today were negative as the stocks experienced sell pressure and closed on offer. Market activity will likely increase in coming sessions with anticipation of corporate earnings of banks,” they said.

In terms of sectoral performance on the first day of the week, three indices advanced while two declined. The NSE Consumer Goods Index led gainers, up 0.8 per cent, trailed by the NSE Insurance Index rose by 0.5 per cent. The NSE Banking Index appreciated by 0.3 per cent.

On the flipside, the NSE Oil & Gas Index shed 2.5 per cent, while the NSE Industrial Goods Index went down by 0.2 per cent.

The market fell on Tuesday due to sell pressure amidst weakening investors’ sentiment. Consequently, the NSE ASI depreciated by 0.66 per cent to close at 42,299.56. The depreciation recorded in the share prices of International Breweries, Zenith Bank, Dangote Cement, Seplat, and Lafarge Africa were mainly responsible for the decline recorded in the index.

“Market performance across sectors was mostly bearish. The 2017 earnings release is expected to improve market activity and investors’ sentiment in coming sessions,” operators said.

Despite the bearish trend, there was increased activity in the market as volume traded inched 14 per cent higher to 438.7 million units while value traded advanced 60.8 per cent to N8.8 billion.

The market rebounded on Wednesday as the NSE ASI jumped by 2.44 per cent to close at 43,330.54. The appreciation recorded in the share prices of Unilever, Nigerian Breweries, Dangote Cement, Stanbic IBTC, and Lafarge Africa were mainly responsible for the gain recorded in the index.

“Market activity and investor sentiments strengthened today. The positive performance of the market was mainly driven by bargain hunting presented by the temporary decline in the prices of some stocks. This trend is likely to be sustained in coming sessions as investors continue to hunt for bargains in perceived undervalued stocks,” according to the analysts.

The NSE Industrial Goods Index led the gainers chart with 4.1 per cent, trailed by the NSE Consumer Goods Index that rose by 2.4 per cent. The NSE Banking Index and NSE Oil & Gas Index also trended northwards, up 0.8 per cent and 0.2 per cent respectively.

But the bullish trend could not be sustained on Thursday as the NSE ASI fell by 1.1 per cent to close at 42,843.38. Profit taking in Dangote Cement Plc (-1.8 per cent), Nigerian Breweries (-3.6 per cent) and GTBank (-2.0 per cent) weighed heavily on the performance. As a result, investors lost N174.8 billion in value as market capitalisation fell to N15.4 trillion. Similarly, activity level declined as volume and value traded fell 35 per cent and 54.9 per cent to 371.2 million units and N4.9 billion respectively.

Performance was mixed across sectors as three indices declined while two advanced. The NSE Oil & Gas Index led gainers, rising 1.0 per cent. The NSE Insurance Index trailed, rising by up 0.1 per cent. On the negative side, the NSE Industrial Goods Index declined 2.2 per cent as investors took profit in Dangote Cement ANGCEM (-1.8 per cent) and Lafarge Africa Plc (-3.5 per cent). The NSE Banking Index fell 1.1 per cent while the NSE Consumer Goods Index depreciated by 0.7 per cent.

The market closed the last day on a positive note, appreciating by 0.08 per cent, bringing the week-on-week gain to 0.72 per cent.

Market Turnover

A further analysis of the activity chart showed that the Financial Services Industry led with 1.534 billion shares valued at N17.670 billion traded in 15,208 deals, thus contributing 70.69 per cent and 45.21 per cent to the total equity turnover volume and value respectively. It was followed by the Industrial Goods Industry, which recorded 200.405 million shares worth N6.436 billion in 1,097 deals. The third place was occupied by Conglomerates Industry with a turnover of 188.097 million shares worth N489.453 million in 998 deals.

Trading in the top three equities namely – FCMB Group Plc, Transnational Corporation of Nigeria Plc and Cement Company of Northern Nigeria Plc, accounted for 617.511 million shares worth N4.086 billion in 2,090 deals.

Also traded during the week were a total of 50,547 units of Exchange Traded Products (ETPs) valued at N4.593 million executed in 12 deals, compared with a total of 111,794 units valued at N1.806 million that was transacted in 10 deals two weeks ago..

A total of 6,574 units of Federal Government Bonds valued at N6.332 million were traded last week in 31 deals, compared with a total of 9,963 units valued at N10.057 million transacted the previous week in 21 deals.

Price Gainers and Losers

Meanwhile, 38 equities appreciated in price during the week under review, higher than 23 of the previous week, while 45 equities depreciated in price, lower than 54 equities of the previous week.

Japual Oil & Maritime Services Plc led the price gainers with 50 per cent, trailed by Unity Bank Plc with 18.7 per cent. N.E.M Insurance Plc chalked up 18.4 per cent, just as Cement Company of Northern Nigeria Plc gained 17.8 per cent. Consolidated Hallmark Insurance Plc and NASCON Allied Industries Plc garnered 16 per cent and 25.8 per cent respectively.

Other top price gainers included: First Aluminium Nigeria Plc (15.3 per cent); Cutix Plc (11.3 per cent); Conoil Plc (9.8 per cent) and Continental Reinsurance Plc (9.2 per cent).

Conversely, Sovereign Trust Insurance Plc led the price losers with 20.8 per cent, trailed by UNIC Diversified Holdings Plc that shed 18.5 per cent. Multiverse Mining and Exploration Plc went down by 17.6 per cent, just as FTN Cocoa Processors Plc and African Alliance Insurance Plc lost 15.9 per cent and 14.2 per cent in that order.

Other top price gainers were: DN Tyre & Rubber Plc (13.6 per cent); Diamond Bank Plc (12.1 per cent); Royal Exchange Plc (11.4 per cent); Courtville Business Solutions Plc (9.3 per cent) and Standard Alliance Insurance Plc (8.3 per cent).

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

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Banking Sector

Ecobank Reports $401 Million Before Tax in Nine Months to September 2022

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

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Ecobank - Investors King

Ecobank Group on Thursday reported a 7% increase in revenue for the nine months ended September 2022, the leading financial institution announced in its audited financial statement.

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

The bank’s operating profit expanded by 12% to $593 million, up from $528 million filed in the corresponding period of 2021, Investors King reports.

Profit before tax rose to $401 million, a 14% increase from $352 million achieved in 2021. Profit paid to shareholders grew by 7% from $182 million to $196 million.

Gross loans and advances to customers increased 5% from $9.469 billion to $9.917 billion. Similarly, deposits from customers increased by declined by 2% to

Commenting on the bank’s performance, Ade Ayeyemi, CEO, Ecobank Group, said: “We continued to deliver on our strategic priorities and are on track to meet full-year targets despite the complex operating environment. Group-wide return on tangible equity reached a record 21%, and profit before tax increased by 14%, or 48% at constant currency (i.e., excluding currency movements).

“These results reflect the resilience, strong brand and diversification of our pan-African franchise. We saw decent client activity in consumer and wholesale payments, trade finance and foreign currency markets. Additionally,
despite inflationary pressures, we maintained a tight lid on costs, thereby improving our cost-to-income ratio to 56.3% from 58.3% in the previous year.

“The dampened economic outlook necessitated maintaining a sound balance sheet with adequate levels of liquidity and capital. As a result, our total capital adequacy ratio at 14.4% is well above our internal and minimum regulatory limits. Also, we hold sufficient gross impairment reserves that fully cover our non-performing loans. Moreover, we have fully repaid the five-year $400 million convertible debt we issued in September and October of 2017.

“Ecobankers have worked extremely hard to serve our customers’ financial needs, and I am proud of them. As always, we will passionately work towards realising our vision and remaining the bank that Africa and friends of Africa trust.”

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Finance

POS Operators Kicked Against CBN Withdrawal Policy

Nigeria does not have the infrastructure to run a cashless society given the size of cash transactions done daily.

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POS Business in Nigeria

Point of Sale (POS) operators in Nigeria under the umbrella of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) have kicked against the new CBN policy which pegs withdrawal on POS to N20,000 daily. 

Investors King earlier reported that the Central Bank of Nigeria (CBN) plans to limit daily withdrawals for both POS and ATMs to N20,000 daily and N100,000 per week.

The policy which was announced in a circular sent to commercial banks yesterday also restricted cash withdrawals from over-the-counter, Automated Teller Machines (ATMs) to N100,000 and N500,000 per week for individuals and corporate organisations, respectively.

Similarly, the memo directed commercial banks to load only N200 and lower denominations into their ATMs

While commenting on the new policy, AMMBAN President, Olojo Victor stated that the new policy is capable of sending members of the association out of business. 

“They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward” Olojo lamented. 

He wondered how an average Nigerian will be able to cope with the new policy, stating that not many Nigerians can transact without the use of cash. 

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised.

“There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king whether we like it or not. Go to the average market we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitising Nigerians on how the alternatives work.

“This will not fly. It is not suitable. It is a good idea but not at the right time,” he concluded. 

Meanwhile, the president of the Bank Customers Association of Nigeria, BCAN, Dr. Uju Ogubunka, commended the CBN on the policy.

He, however, noted that the policy would be difficult to implement owing to some issues such as broadband connection and sensitisation among others. 

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Finance

Nigeria’s External Debt Rose From $18.3bn in 2010 to $103bn in 2022; Says World Bank

Nigeria spent $9.6 billion on debt servicing in 12 years

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The World Bank stated yesterday that Nigeria’s external debt increased from $18.3 billion in 2010 to $103 billion in 2022. The bank added that the country spent $9.6 billion on debt servicing in 12 years. 

According to the “International Debt Report” released by the bank, Nigeria’s foreign debts rose astronomically by 305 per cent during the 12 years.

The report added that external debt stood at $76.21 billion in 2021 but rose quickly to $103 billion by the first half of 2022 (H2 2022).

Furthermore, cumulative annual interest payments on external debts rose sharply by 2,819 per cent to $1.73 billion in 2021 from $59.3 million in 2010.  

Investors King understands that the implementation of Nigeria’s budget heavily relies on external borrowings.  

An example is the construction of railway tracks which are heavily funded by the Chinese loan while the country’s 2023 budget proposal also has a deficit of about N10 billion which will be significantly sourced from international creditors.

Experts have warned that Nigeria’s rising debt could hamper the nation’s overall development, especially if the debts are not tied to projects with economic value.

Meanwhile, the report added further that principal repayment on the external debt gulped $30.66 billion during the 12 years period with annual principal repayment rising by 469 percent to $6.77 million in 2021 from $1.189 million in 2010. 

In the executive summary, the report noted that Nigeria and other developing countries are at risk of serious debt-related issues. The report cautioned that rising interest rates coupled with the recent sluggish economic movement may force a number of developing countries into a debt crisis. 

Speaking on the report, World Bank Country Director for Nigeria, Shubham Chaudhuri stated that Nigeria’s economy does not reflect the huge level of debt stock, adding that multilateral institution is worried that the cost of servicing debt could exceed the nation’s revenue.  

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