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Equities Recover With N35b Gain

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  • Equities Recover With N35b Gain

Nigerian equities snapped a five-day losing streak yesterday as bargain-hunting in the banking and oil and gas sectors rallied the market to a net capital gain of N35 billion.

Benchmark indices at the Nigerian Stock Exchange (NSE) showed average gain of 0.28 per cent, equivalent to net capital gain of N35 billion. The modest gain improved the negative average year-to-date return to -8.65 per cent.

The All Share Index (ASI)- the main value-based index that tracks share prices at the Exchange, rose from its opening index of 34,837.50 points to close at 34,933.68 points. Aggregate market value of all quoted equities also increased from its opening value of N12.718 trillion to close at N12.753 trillion.

The recovery was largely driven by gains recorded by large-cap banking stocks. The NSE Banking Index appreciated by 1.4 per cent. The NSE Oil and Gas Index inched up by 0.3 per cent while the NSE Industrial Goods Index closed flat. However, the NSE Consumer Goods Index dropped by 0.7 per cent while the NSE Insurance Index dipped by 0.3 per cent.

There were 23 gainers to 18 losers. Okomu Oil Palm led the gainers with a gain of N2.40 to close at N79.90. Guaranty Trust Bank followed with a gain of 55 kobo to close at N37.05. FBN Holdings rose by 30 kobo to close at N9.15. Custodian Investment added 24 kobo to close at N5.41. C & I Leasing rose by 22 kobo to close at N2.72 while Nigerian Aviation Handling Company and Oando chalked up 20 kobo each to close at N4 and N5.20 respectively.

On the downside, Nigerian Breweries led the losers with a drop of N2 to close at N93. PZ Cussons Nigeria followed with a loss of N1.50 to close at N13.50. UAC of Nigeria declined by 90 kobo to close at N11.20. Forte Oil lost 85 kobo to close at N19 while Fidson Healthcare declined by 60 kobo to close at N5.40 per share.

Total turnover stood at 240.46 million shares valued at N3.61 billion in 3,400 deals. United Bank for Africa was the most active stock with a turnover of 54.44 million shares worth N436.03 million. Access Bank followed with 38.45 million shares worth N359.44 million while Stanbic IBTC Holdings placed third with 35.23 million shares worth N1.68 billion.

Market pundits remained cautious on the outlook for the equities market. “Due to market sentiments today (Tuesday), we expect bargain hunting to be sustained in tomorrow (Wednesday)’s trading session. Nonetheless, we maintain a bearish outlook for the market in the near term,” Afrinvest Securities stated.

SCM Capital stated that it maintains its conservative outlook for the market, due to the absence of a positive catalyst amidst political uncertainty as the 2019 electoral cycle draws nearer.

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

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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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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