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Equities Continue Slide With N101b Loss

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BRITAIN-EU-STOCKS-BREXIT-POLITICS
  • Equities Continue Slide With N101b Loss

Nigerian equities continued on the downside yesterday as investors lost N101 billion to capital depreciation. Benchmark indices at the Nigerian Stock Exchange (NSE) declined by an average of 0.76 per cent, depressing further the negative average year-to-date return to -4.64 per cent.

The All Share Index (ASI)-the main index for the equities market, dropped by 278.13 absolute points, representing a decline of 0.76 per cent to close at 36,470.05 points as against its opening index of 36,748.18 points. Total market capitalisation of quoted equities declined correspondingly by N101 billion to close at N13.211 trillion compared with its opening value of N13.312 trillion.

With 27 losers to 20 gainers, the market appeared to show increased bargain-hunting despite the negative overall market position. Most sectoral indices closed positive. The NSE Oil & Gas Index rose by 1.2 per cent. The NSE Banking Index and NSE Insurance Index appreciated by 0.2 per cent each while the NSE Industrial Goods Index closed flat. However, the NSE Consumer Goods Index declined by 2.5 per cent.

Nestle Nigeria led the losers with a drop of N84.70 to close at N1,442.30. Nigerian Breweries followed with a loss of N2.40 to close at N105.60. International Breweries lost N1.80 to close at N39.20. Zenith bank dropped by N1 to close at N22.95 while UAC of Nigeria declined by 75 kobo to close at N13.25 per share.

On the positive side, Guaranty Trust Bank led the gainers with a gain of N1.45 to close at N38. Dangote Sugar Refinery followed with a gain of N1.20 to close at N19.50. Oando rose by 45 kobo to close at N5.20. Eterna added 40 kobo to close at N6.90 while NASCON Allied Industries gathered 25 kobo to close at N20.25 per share.

Total turnover stood at 296.59 million shares valued at N4.86 billion in 3,684 deals. Guaranty Trust Bank topped the activity chart with 78.36 million shares valued at N2.98 billion. Med-View Airline followed with 50 million shares worth N102.25 million while Zenith Bank placed third with 26.51 million shares valued at N608.97 million.

Analysts at Cordros Capital noted that continued sell-offs and the absence of a near term one-off positive catalyst continues to dampen the outlook for equities in the short-to-medium term.

“However, strengthened macro-economic fundamentals remain supportive of gains in the long term,” Cordros Capital stated.

“We maintain that the current sentiment will persist tomorrow. Looking ahead, position taking in fundamentally sound stock remains the only bullish trigger,” SCM Capital stated.

Analysts at Afrinvest Securities however noted that the Relative Strength Index (RSI) yesterday further fell to 27.5 points below the oversold benchmark, thus cautious optimism on the possibility of a rebound over the near term, buoyed by positive first half 2018 earnings results.

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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