- Large-cap Stocks Drag Equities to N189b Loss
After a momentary recovery on Tuesday, Nigerian equities suffered a major decline yesterday as foreign portfolio investors led massive selloffs in stock market’s largest companies. Benchmark indices at the Nigerian Stock Exchange (NSE) showed an average decline of 1.49 per cent, equivalent to net capital depreciation of N189 billion.
This slump worsened the average year-to-date return to -10.01 per cent. Quoted equities had so far this month lost an average of 1.25 per cent.
With 26 losers to 20 gainers, the negative overall market position was due to widespread losses, especially losses recorded by large-cap stocks such as Dangote Cement, Guaranty Trust Bank, Seplat Petroleum Development Company and Zenith Bank Plc.
All indices closed in the negative with the exception of the NSE Consumer Goods Index, which inched up by 0.3 per cent. The NSE Oil & Gas Index declined by 3.2 per cent. The NSE Industrial Goods Index dropped by 2.3 per cent. The NSE Insurance Index depreciated by 1.6 per cent while the NSE banking Index dipped by 1.2 per cent.
“Going forward, we believe market performance will remain largely bearish as sentiments remain soft,” Afrinvest Securities stated.
Seplat Petroleum Development Company, NSE’s second highest-priced stock, led the losers with a loss of N47 to close at N603. Dangote Cement, Nigeria’s largest quoted company, followed with a loss of N7 to close at N223. Stanbic IBTC Holdings dropped by N1 to close at N47. Flour Mills of Nigeria lost 80 kobo to close at N21.20. Ecobank Transnational Incorporated, Lafarge Africa and Zenith Bank dropped by 45 kobo each to close at N19.55, N23.05 and N21.45 respectively while Guaranty Trust Bank, Nigeria’s largest financial institution, declined by 40 kobo to close at N36.65 per share.
On the positive side, Forte Oil and International Breweries led the gainers with a gain of N1 each to close at N20 and N33 respectively. Nigerian Breweries rose by 50 kobo to close at N93.50. C & I Leasing added 27 kobo to close at N2.99 while Fidson Healthcare and Oando chalked up 10 kobo each to close at N5.50 and N5.30 respectively.
Total turnover stood at 200.28 million shares valued at N2.16 billion in 3,224 deals. United Bank for Africa led the activities chart with 22.48 million shares valued at N180.35 million. Stanbic IBTC Holdings followed with 19.24 million shares valued at N904.44 million while FCMB Group placed third with 19.13 million shares worth N34.93 million.
“We guide investors to trade cautiously in the short to medium, as selloffs are likely to persist, amidst the absence of a one-off positive trigger, as well as likely negative sentiments of investors, particularly foreign players, as a result of contagion effect of emerging market selloffs, and political concerns ahead of the 2019 election,” Cordros Capital stated.
Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc
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.
COVID-19: CBN Extends Loan Repayment by Another One Year
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.
MTN Nigeria Generates N1.35 Trillion in Revenue in 2020
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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