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Equities Market Remains Bearish on Continuing Sell Pressure



Nigerian Exchange Limited - Investors King
  • Equities Market Remains Bearish on Continuing Sell Pressure

Sell pressure at the stock market persisted last week despite the release of more improved financial results and declaration of dividends by some companies for 2017 financial year. The market has remained bearish in the past weeks as investors sold to take profit in bellwether stocks.

However, the negative performance was expected to cease once the full year corporate earnings began to come in. Despite the release of improved results with significant returns being recommended, the sell pressure persisted. Having declined by 2.9 per cent the previous week, the market depressed further last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 1.11 per cent to close at 41,472.10, while market capitalisation ended lower at N14.982 trillion.

Similarly, all other indices finished lower during the week with the exception of the NSE CG, NSE Banking and NSE Pension Indices that appreciated by 1.07 per cent, 3.31 per cent and 1.67 per cent respectively.

Daily Performance

Trading resumed for the week with a decline as the bears remained in control for the fourth consecutive session. As a result, the NSE ASI fell 0.21 per cent to close lower at 41,845.92. Similarly, market capitalisation closed lower at N14.96 trillion.

The depreciation recorded in the share prices of Nigerian Breweries, Ecobank Transnational Incorporated, Flour Mills, Transcorp, and Stanbic IBTC Holdings among others were mainly responsible for the decline.

However, the bears were strongly in control as 36 stocks depreciated compared with 14 others that appreciated. Cadbury Nigeria Plc led the price losers with 9.6 per cent, trailed by Niger Insurance Plc with 9.5 per cent. Unity Bank Plc shed 8.8 per cent, while FTN Cocoa Processing and LASACO Assurance Plc fell by 7.1 per cent and 5.5 per cent respectively. WAPIC Insurance Plc and Linkage Assurance Plc closed 4.9 per cent and 4.8 per cent lower in that order.

Other top price losers included: Wema Bank Plc, Dangote Flour Mills Plc, Skye Bank Plc, Ecobank Transnational Incorporated (4.8 per cent apiece); Continental Reinsurance Plc (4.6 per cent); University Press Plc, Tantalizer Plc(4.5 per cent); Japaul Oil & Maritime Services Plc (4.4 per cent).

On the positive side, C & I Leasing Plc led the price gainers with 9.9 per cent, trailed by United Capital Plc with 5.6 per cent, while N.E.M Insurance Plc (4.8 per cent). Cutix Plc appreciated by 4.4 per cent, just as PZ Cussons Nigeria Plc and African Prudential Plc chalked up 2.3 per cent and 1.5 per cent respectively

Market analysts at Cordros Capital said: “In our view, it is likely investors take advantage of soft prices to hunt bargains in the equities market, leading to a positive outlook in the short term. Also, strengthening macroeconomic fundamentals remain supportive of gains in the medium to long term.”

The market depreciated further on Tuesday as more investors locked in profits, thereby depressing the market by 0.35 per cent to 41,686.36. Market capitalisation decreased by N68.6 billion to be at N14.8 trillion.

The depreciation recorded in the share prices of GTBank, Lafarge Africa, Flour Mills, Nigerian Breweries, and Seplat contributed to the negative close.

The bearish trend reduced the year-to-date (YTD) growth to 8.5 per cent as at Wednesday. The bearish performance was largely driven by sell pressures in Nestle, Stanbic IBTC Holdings, and Lafarge. While the index fell, market activity improved as volume and value traded inched 22.7 per cent and 44.4 per cent higher to 488.7 million shares and N5.6 billion respectively.

African Alliance Insurance Plc (82.8 million shares), Japaul Oil (75.6 million shares) and Fidelity Bank (63.9 million shares ) were the top traded stocks by volume while Dangote Cement (N1.1 billion), GTBank (N886.6 million) and Nigerian Breweries (N867.7 million) led the top traded stocks by value.

In terms of sectoral performance, three indices closed negatively, one ended in the bulls’ territory, while one remained flat. The NSE Industrial Goods Index led losers with 2.5 per cent, trailed by the NSE Insurance Index with 1.9 per cent. The NSE Consumer Goods Index shed 0.7 per cent. The NSE Banking Index was the sole gainer, chalking up 0.1 per cent, while the NSE Oil & Gas Index stagnated.

The market recovered after three days of decline on Thursday, rising by 0.33 per cent. According to market analysts, the market upbeat performance was due to the improved investor confidence in the market, driven by earnings releases.

“Today’s gain was largely across the bellwether counters in the market as the NSE-30, which accounts for the most liquid and capitalised counters in the market recorded a gain of 0.45 per cent,” they said.

Sectoral performance showed that the five closed in bulls’ territory. The NSE Insurance Index led with 1.6 per cent, followed by the NSE Oil & Gas Index with a 0.6 per cent appreciation. The NSE Banking Index and NSE Industrial Goods Index rose by 0.5 per cent apiece, while the NSE Consumer Goods Index added 0.4 per cent.

Market Turnover

Meanwhile, a total turnover of 2.328 billion shares worth N28.927 billion in 25,530 deals was recorded last week investors on the floor of the exchange in contrast to a total of 2.444 billion shares valued at N36.665 billion that exchanged hands last week in 26,712 deals the previous week.

The Financial Services Industry led the activity chart with 1.784 billion shares valued at N20.385 billion traded in 16,823 deals, thus contributing 76.6 per cent and 70.5 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 171.111million shares worth N5.404 billion in 4,055 deals. The third place was occupied by Oil and Gas

Industry with a turnover of 124.065million shares worth N296.727 million in 1,607 deals. Trading in the top three equities namely-Zenith Bank Plc, Access Bank Plc and Fidelity Bank Plc accounted for 664.391 million shares worth N10.659 billion in 6,429 deals, contributing 28.54 per cent and 36.8 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 4,165 units of Exchange Traded Products (ETPs) valued at N78,276.06 executed in 15 deals, compared with a total of 1.889 million units valued at N10.512 million that was transacted the previous week in four deals.

Similarly, a total of 5,152 units of Federal Government Bonds valued at N4.562 million were traded this week in 24 deals, compared with a total of 40,566 units valued at N44.313 million transacted two week ago in 29 deals.

Price Gainers and Losers

The price movement chart showed that 33 equities appreciated in price during the week, higher than 25 of the previous week, while 49 equities depreciated in price, lower than 60 equities of the previous week.

Glaxosmithkline Consumer Nigeria Plc led the price gainers with 21.4 per cent, trailed by Fidelity Bank Plc with 17.7 per cent. Diamond Bank Plc garnered 11.9 per cent, just as Zenith Bank Plc and Transnational Corporation of Nigeria chalked up 9.4 per cent and 8.2 per cent in that order.

Other top price gainers included: Eterna Plc (7.5 per cent); United Capital Plc ( 6.5 per cent); NASCON Allied Industries Plc 5.2 per cent); Northern Nigeria Flour Mills Plc (5.0 per cent) and C & I Leasing Plc (4.9 per cent).

Conversely, FTN Cocoa Processors Plc and Unity Kapital Assurance Plc led with 21.43 per cent respectively. Niger Insurance Plc trailed with 16.6 per cent, just as Multiverse Mining & Exploration Plc went down by 16.0 per cent.

Cadbury Nigeria Plc shed 14.9 per cent , while African Alliance Insurance Plc went down by 14.8 per cent.

Other top price gainers were: UNIC Diversified Holdings Plc (14.2 per cent); MCNichols Plc (14 per cent); Mutual Benefits Assurance Plc (13.6 per cent); Tantalisers Plc (13.6 per cent).

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

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



world bank - Investors King

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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Banking Sector

A Failed Attempt to Trigger a Run on Banks



Fidelity Bank
As market sentiment remains highly volatile and driven by news flow, banks liquidity levels can become vulnerable due to spread of inaccurate information.
As Nigerian banks put finishing touches to their recapitalisation plans as directed by the Central Bank of Nigeria (CBN), industry watchers have seen how social media mercenaries and their hirelings are deliberating distorting the truth and pushing campaigns that spread false information which could result in deposit outflows from their targeted banks.
Earlier this month when the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank, it gave reasons for the decision.
The reason was clearly stated! “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability,” CBN noted.
The CBN said Heritage Bank had continued to suffer and had no reasonable prospects of recovery, thereby making the revocation of the license the next necessary step.
A statement by Hakama Sidi Ali, acting Director, Corporate Communications of the CBN, said the apex bank acted in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act, BOFIA, 2020.
Many market watchers, particularly those following developments in the banking industry did not think the CBN should have done otherwise and subsequent appointment of the Nigeria Deposit Insurance Corporation, NDIC, as the liquidator.
Mischievous ‘list’ of other banks
Shortly after the apex bank hammer fell on Heritage Bank, social media mischief makers released their own ‘list’ of other banks they felt will go the Heritage way – not minding the illegality of assuming such a regulatory position.
Thanks to Central Bank of Nigeria (CBN) for quickly debunking the fake news which had mentioned the names of other banks – Fidelity Bank, Wema Bank, Polaris Bank and Unity Bank.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.
“The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system. The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs).
“These plans are currently being reviewed by the Bank. In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalise will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.
“The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness,” said CBN’s Sidi Ali said in a June 4 statement in response to the false allegations of license withdrawals.

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Banking Sector

MIPAD Announces Onyeali-Ikpe Among Global Top 100 Trade Champions of African Descent Worldwide



In acknowledgment of her outstanding impact on global trade, Dr. Nneka Onyeali-Ikpe, the Group Managing Director and Chief Executive Officer of Fidelity Bank Plc, has been recognized as one of the honorees in the 2024 Most Influential Global Top 100 Export and International Trade Edition.

Themed, “Championing the Vision of Global Africa as a Unified Economic Block and Single Market,” the initiative which was announced on May 25, 2024 in celebration of Global Africa Day, lists several leaders in the global trade space of African descent, including the President, African Export–Import Bank (Afreximbank), Prof. Benedict Okey Oramah,); Minister of Trade and Export Promotion, Algeria, H.E. Kamel Rezig; Chairman, World Trade Centre Accra, Ghana, H.R.H Togbe Afede; the Nigerian Minister of Industry, Trade and Investment, Dr. Doris Nkiruka Uzoka-Anite; Executive Director and CEO, Nigerian Export Promotion Council (Nigeria), Nonye Ayeni; Executive Vice President, Intra-African Trade Bank (IATB), Kanayo Awani; Director, Trade Development (Africa & Caribbean), World Trade Centre Miami, US, Kemi Arosanyin; Secretary of State for Business and Trade and President of the Board of Trade (United Kingdom/Nigeria), Kemi Badenoch; President, US-Africa Business Centre at US Chamber of Commerce, Kendra Gaither; and President of the Buenaventura Chamber of Commerce (Colombia), Milady Garces Arboleda.

According to a statement by Most Influential People of African Descent (MIPAD), the organisers of the initiative, “These honorees are recognized for their groundbreaking achievements in Trade & Export and are called upon to champion the vision of a unified Global Africa as an economic block. This recognition aligns with the ethos of the International Decade for People of African Descent, highlighting MIPAD’s ongoing commitment to celebrating individuals, organizations, and governments demonstrating outstanding leadership in advancing people of African descent globally.”

Commenting on the initiative, Dr Onyeali-Ikpe said, “This recognition demonstrates our market leadership in the international trade space at Fidelity Bank and our devotion to helping Nigerian businesses play a more active role in the global trade space.

Since 2022, we have hosted the largest private-sector driven trade expo tagged the Fidelity International Trade and Creative Connect (FITCC) with hundreds of export businesses from Nigeria, off-takers in the UK and USA, investors, regulators, media and other key stakeholder in the trade sector. Through FITCC, we have closed deals totaling $450million. Our commitment as a bank is to do more in this space and we thank MIPAD for the recognition.”

The Most Influential People of African Descent (MIPAD), is a global civil society initiative in support of the International Decade for People of African Descent, proclaimed by United Nation’s General Assembly resolution 68/237, to be observed from 2015 to 2024. MIPAD identifies high achievers of African descent in public and private sectors from all around the world as a progressive network of relevant actors to join together in the spirit of recognition, justice and development.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged commercial bank with over 8.3 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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