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Large-cap Stocks Drag Equities to N189b Loss



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  • 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.

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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ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs



ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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United Capital Plc Reports Stellar Growth with 65% Profit Increase, Announces Dividends



United Capital - Investors King

United Capital Plc (NGX: UCAP) has unveiled its unaudited financial results for the period ending June 30, 2024.

The company reported a 38% increase in gross earnings year-on-year to N15.15 billion. Profit before tax soared by 63% to N9.06 billion while profit after tax surged by 65% to N7.74 billion.

Total assets rose by 27% in the first half to N1.19 trillion, and shareholders’ funds increased by 33% to N120.34 billion.

These robust results have prompted United Capital to declare an interim dividend of N0.90 per 50 kobo ordinary share, alongside a generous bonus share offering of “2 for 1.”

Peter Ashade, Group CEO, expressed satisfaction with the strong financial outcomes, highlighting the company’s commitment to creating wealth and delivering superior value to shareholders.

“This marks a historic moment with our first-ever interim dividend and bonus share announcement, demonstrating our dedication to stakeholder value,” Ashade stated.

The company remains confident about sustaining its growth trajectory throughout 2024, bolstered by nearly N1.3 trillion in funds under management.

United Capital continues to prioritize activities that enhance and preserve value for stakeholders, maintaining its competitive edge and profitability.

With a focus on trusts, mutual funds, and professionally managed investments, the group is strategically positioned to achieve its growth objectives, ensuring sustainable returns for all involved.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits



Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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