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Equities Market Dips to 52-Week Low on Continuing Bear Run



Egypt Stocks
  • Equities Market Dips to 52-Week Low on Continuing Bear Run

The equities market fell to a 52-week low last week as the bears consolidated their hold on the market. The persisted selloffs in bellwether counters led to a decline of 2.3 per cent in the Nigerian Stock Exchange All-Share Index (NSE ASI) to close at 34,037.91. Market capitalisation shed N295.9 billion to close at N12.4 trillion.

Bears dominated the market four out of the five trading days. The only gain in the week was on Tuesday when the market fell 0.03 per cent.

Market analysts said the downtrend remains largely driven by the lingering uncertainties around the 2019 general elections which they said they expect to be sustained.

“Nevertheless, we maintain that the current trend is not necessarily a true reflection of the fundamentals of companies and we believe that opportunities still remain in the market. Consequently, despite the overall negative performance, there were periods of intraday gains during the week,” they said.

All the sectors closed in the negative led by the NSE Oil& Gas Index that went down by 3.7 per cent, followed by the NSE Consumer Goods Index with 2.7 per cent depreciation.

Similarly, the NSE Banking Index, NSE Industrial Goods Index and NSE Insurance Index dipped by 2.4 per cent and 1.9 per cent and 0.1 per cent respectively.

Our outlook for equities in the near-to-medium term is negative, owing to the absence of a near term positive catalyst and lingering jitters across the global space. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term.

Daily Performance

The market opened Monday, which was also the first day of September on negative note as the index shed 0.03 per cent. The market had closed the month of August with a decline of 5.9 per cent and some level of bargain hunting was being expected last week due to the low prices of many stocks. However, that was yet to materialise as stocks continued to plummet.

Some other analysts had guided investors to trade cautiously in the short-to-medium term, saying the absence of a positive one-off catalyst and brewing political concerns, continue to cast a shadow on their outlook for risky assets.

A total of 19 stocks depreciated on Monday while 18 appreciated. Jaiz Bank Plc led the price losers with 10 per cent, trailed by Flour Mills of Nigeria Plc with 9.6 per cent, while Transcorp Plc went down by 7.9 per cent. Prestige Assurance Plc, Veritas Kapital Insurance Plc and Mutual Benefits Assurance Plc dipped by 7.6, 6.9 per cent and 6.6 per cent in that order.

On the positive side, Consolidated Hallmark Insurance Plc led the price gainers with 10 per cent, trailed by AIICO Insurance Plc with 9.7 per cent, just as Continental Reinsurance Plc garnered 9.4 per cent.

NPF Microfinance Bank Plc, WAPIC Insurance Plc and Union Diagnostic and Clinical Services Plc appreciated by8.9 per cent, 8.3 per cent and 7.6 per cent respectively.

Meanwhile, activity level waned as volume and value traded fell 65.8 per cent and 68.0 per cent to 131.5 million shares and N3.1 billion respectively. The top traded stocks by volume were Nigerian Breweries Plc (19.1 million), Stanbic IBTC Bank Plc (11.8 million shares) and AIICO Insurance Plc (11.2 million) while Nigerian Breweries Plc (N1.8 billion), Stanbic IBTC Bank (N0.6 billion) and Zenith Bank Plc (N0.1 billion) were the top traded stocks by value.

The market rebounded on Tuesday as the NSE ASI rose 0.28 per cent to close at 34,933.68 while market capitalisation added N36.1 billion to close at N12.8 trillion. Buying interest in banking stocks such as Zenith Bank Plc, GTBank Plc, United Bank for Africa Plc buoyed the return of the bulls. However, 23 stocks appreciated compared with 18 that lost value.

AIICO Insurance Plc led the price gainers with 10 per cent, trailed by Jaiz Bank Plc and C & I Leasing Plc with 8.8 per cent apiece. Diamond Bank Plc appreciated by 8.7 per cent, just as Japual Oil & Maritime Services Plc and WAPIC Insurance Plc chalked up 8.3 per cent,7.6 per cent respectively.

Other top price gainers included: Mutual Benefits Assurance Plc(7.1 per cent); Consolidated Hallmark Insurance Plc (6.0 per cent); Skye Bank Plc (5.7 per cent); NAHCO Plc (5.2 per cent).

Conversely, Fidson Healthcare Plc, PZ Cussons Nigeria Plc and Universal Insurance Plc led with 10 per cent apiece. Tripple Gee & Company Plc shed 9.4 per cent, just as Guinness Nigeria Plc went down by 8.5 per cent.

The shares of Guinness Nigeria depreciated despite the company’s improved results for the year ended June 30, 2018. The audited results of the brewing firm showed a revenue of N125.9 billion, up by 14 per cent from N125.92 billion in 2017. Net financing expenses fell 54 per cent to N3.443 billion, from N7.527 billion following a rights issue of last year.

Profit before tax stood at N9.943 billion, up from N2.662 billion, while PAT soared by 249 per cent from N1.923 billion to N6.718 billion in 2018. Based on the improved performance, the board recommended a dividend of 184 kobo per share, compared with 64 kobo paid the previous year.

Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Baker Magunda, said: “Improved operating performance combined with lower finance charges have helped us deliver an overall PAT increase of 249 per cent during year. The execution of our strategy is working as we delivered both top line growth and margin expansion while also increasing investment behind our brands. Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward. Whilst we remain optimistic about the execution of our strategy, we note that the operating and competitive environment is likely to continue to be challenging in the 2019 financial year.”

The gain recorded on Tuesday could not be sustained on Wednesday as the bears resurfaced pushing the year-to-date (YtD) decline to 10 per cent. The NSE ASI ended the day lower at 34,414.37, while market capitalisation shed N190.5 billion to close at N12.6 trillion.

Profit booking by investors profit in bellwether counters such as Dangote Cement Plc, Zenith Bank Plc, Guaranty Trust Bank Plc and Seplat Petroleum Development Company Plc led to the negative performance. In all, 26 stocks lost value as against 20 that appreciated. Mutual Benefits Assurance Plc, which is shopping for N2 billion via Rights Issue, led the price losers with 10 per cent. It was followed by Learn Africa Plc with 9.8 per cent, just as Chams Plc and Law Union & Rock Insurance Plc fell by 9.6 per cent and 9.5 per cent in that order.

Niger Insurance Plc and AIICO Insurance Plc shed 9.0 per cent apiece just as Universal Insurance Plc and Sovereign Trust Insurance Plc depreciated 8.3 per cent and 8.0 per cent respectively.

On the other hand, C& I Leasing Plc led the price gainers with 8.5 per cent trailed by Jaiz Bank Plc with 8.1 per cent. Sterling Bank Plc and Forte Oil Plc garnered 5.8 per cent and 5.2 per cent in that order.

Other top price gainers included: Wema Bank Plc (5.0 per cent); Regency Alliance Insurance Plc (4.5 per cent); Cornerstone Insurance Plc, Transcorp Plc (4.1 per cent each) and Veritas Kapital Assurance Plc (3.7 per cent).

Meanwhile, activity level fell as volume and value traded fell 16.7 per cent and 40.0 per cent to 200.3 million shares and N2.2 billion respectively. The top traded stocks by volume were United Bank for Africa Plc (22.5 million shares), Stanbic IBTC (19.3 million shares) and FCMB Group Plc (19.1 million shares) while Stanbic IBTC (N904.2 million ), GTBank (N268.2 million) and Seplat (N260.8 million) led by value.

In terms of sectoral performance four of the five tracked sectors closed in the bears’ territory. Only the NSE Consumer Goods Index emerged gainer with 0.3 per cent.

The stock market depreciated further on Thursday as investors continued with sell pressure. As a result, NSE ASI fell 0.88 per cent to close at 34,110.22, while market capitalisation ended lower at N12.45 trillion. The negative performance was partly due to intense sell pressure in banking and consumer goods large-cap counters. Specifically, some of the leading price losers were GTBank Plc, Stanbic IBTC Holdings Plc, United Bank for Africa Plc, Nigerian Breweries Plc and Zenith Bank Plc.

Stanbic IBTC Holdings shed 4.2 per cent on a day its banking subsidiary, Stanbic IBTC Bank reported to the NSE that the Central Bank of Nigeria (CBN) had deducted the sum of N1.886 billion from its account. The N1.886 billion is the fine the apex bank imposed on Stanbic IBTC Bank, along with three other banks for illegally assisting MTN Communications Nigeria to repatriate $8.134 billion between 2007 and 2015.

However, in a letter dated 06 September, 2018 to NSE, Stanbic IBTC Bank, reiterated its position that it has not breached any extant laws relating to Certificates of Capital Importation (CCI) executed on behalf of MTN.

“Stanbic IBTC Holdings PLC as well as our banking subsidiary maintain our position on this matter, which is the fact that the Bank has done nothing illegal and accordingly the Bank will continue to provide CBN with documents and details in support of our contention that our actions in relation to these transactions were not illegal,” the bank said, reassuring stakeholders that the current situation would not affect the seamless transactions with the bank.

Despite, the foregoing the shares of Stanbic IBTC Holdings Plc closed as the eight highest price loser, falling from N47.00 to N45.00 per share.

However, WAPIC Insurance Plc led the price losers’s table with 10 per cent, trailed by Eterna Plc with 9.4 per cent. Law Union & Rock Insurance Plc shed 9.0 per cent, just as Standard Alliance Insurance Plc went down by 8.5 per cent. Unilever Nigeria Plc, AIICO Insurance Plc and Guaranty Trust Bank Plc depreciated by 6.4 per cent, 5.5 per cent and 4.6 per cent respectively.

On the positive side, A.G Leventis Nigeria Plc led the price gainers with 10 per cent, trailed by Fidson Healthcare Plc with 9.0 per cent. Sovereign Trust Insurance Plc chalked up 8.7 per cent, just as Royal Exchange Plc added 8.3 per cent. Continental Reinsurance Plc and LASACO Assurance Plc garnered 6.6 per cent and 6.4 per cent order.

The market went down 0.21 per cent on Friday, which was the last day of the week following the depreciation recorded in the share prices of Dangote Cement, Zenith Bank, Lafarge Africa, Transcorp, and Oando Plc among others.

Market Turnover

Meanwhile, investors traded 892.725 million shares worth N13.075 billion in 15,607 deals last week, down from 1.533 billion shares valued at N23.026 billion that exchanged hands in 17,009 deals the previous week. The Financial Services Industry remained the most active recording 757.992 million shares valued at N9.251 billion traded in 9,653 deals, thus contributing 84.9 per cent and 70.7 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 43.651 million shares worth N2.754 billion in 2,231 deals, while the third place was occupied by Oil and

Gas Industry with a turnover of 28.892 million shares worth N558.264 million in 1,430 deals.

Trading in the top three equities namely – UBA, GTBank and Stanbic IBTC Bank Plc accounted for 257.188 million shares worth N6.996 billion in 2,270 deals, contributing 28.8 per cent and 53.5 per cent to the total equity turnover volume and value respectively.

Also traded during the week were a total of 1.248 units of Exchange Traded Products (ETPs) valued at N197,421.45 executed in three deals, compared with a total of 2,422 units valued at N3.752 million that was transacted two weeks ago in 15 deals.

A total of 64,438 units of Federal Government Bonds valued at N70.323 million were traded last week in 38 deals compared with a total of 42,158 units valued at N42.397 million transacted last the previous week in 25 deals.

Price Gainers and Losers

A look at the price movement chart showed that 33 equities appreciated in price in the week under review, lower than 37 in the previous week, while 39 others depreciated , higher than 34 equities of the previous week.

Consolidated Hallmark Insurance Plc led the price gainers with 26.6 per cent, trailed by Continental Reinsurance Plc with 16.7 per cent. C & I Leasing Plc added 16 per cent, while Skye Bank Plc garnered 13.7 per cent and Cornerstone Insurance Plc chalked 13.7 per cent and 12.5 per cent in that order. NPF Microfinance Bank Plc and Neimeth International Pharmaceuticals Plc appreciated by 10 per cent each.

Other top price gainers included: GlaxoSmithkline Consumer Nigeria Plc (9.1 per cent); AIICO Insurance Plc (8.5 per cent) and WAPIC Insurance Plc (8.3 per cent).

Conversely, Law Union and Rock Insurance Plc led the bears, shedding 26 per cent. Standard Alliance Insurance Plc trailed with 23.6 per cent. Universal Insurance Company Plc, Flour Mills of Nigeria Plc and Niger Insurance Plc went down by 17.5 per cent, 11.5 per cent and 11.3 per cent respectively.

Other top price losers were: PZ Cussons Nigeria Plc, Mutual Benefits Assurance Plc (10 per cent apiece); Learn Africa Plc (9.8 per cent); Chams Plc (9.6 per cent) and Tripple Gee and Company Plc (9.4 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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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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