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Investors Lose N624.4bn in One Week

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  • Stock Market: Investors Lose N624.4bn in One Week

Investors in the equities market of the Nigerian Stock Exchange lost a total of N624.4bn last week, with the year-to-date loss expanding to 16.3 per cent.

The market capitalisation, which stood at N12.426tn on September 7, 2018, dropped to N11.802tn at the close of trading last Friday, while the NSE All-Share Index shed 502 basis points to 32,327.59bps after red closes in four out of five sessions during the week.

A total turnover of 960.940 million shares worth N18.329bn were traded by investors on the floor of the Exchange during the week in 16,896 deals, in contrast to a total of 892.725 million shares valued at N13.075bn that exchanged hands in 15,607 deals the previous week.

The financial services industry (measured by volume) led the activity chart with 774.087 million shares valued at N9.244bn traded in 10,637 deals, thus contributing 80.56 per cent and 50.44 per cent to the total equity turnover volume and value, respectively.

The conglomerates industry followed with 54.805 million shares worth N80.062m in 740 deals.

The third place was occupied by the consumer goods industry with a turnover of 43.013 million shares worth N3.341bn in 2,468 deals. Despite a 10 per cent surge in Nigerian Breweries Plc at week close, the consumer goods sector shed 537 bps week on week amid weightier losses in the largest stock in the sector, Nestlé Nigeria Plc.

The industrial goods and banking sectors recorded the heaviest hits as heavyweights Dangote Cement Plc, Lafarge Africa Plc, United Bank for Africa Plc and Zenith Bank Plc all touched new lows.

The oil and gas sector was the best of a bad bunch as negative activity from Forte Oil Plc and Conoil Plc weighed the sector down.

Trading in the top three equities namely, namely Guaranty Trust Bank Plc, Zenith Bank and Access Bank Plc (measured by volume), accounted for 329.986 million shares worth N7.573bn in 3,871 deals, contributing 34.34 per cent and 41.32 per cent to the total equity turnover volume and value, respectively.

Analysts at Vetiva Capital Management Limited said recent developments surrounding regulatory fines and penalties appeared to have worsened investor sentiment.

According to them, though other African markets appear to have also suffered from weak investor sentiment (Kenya: -4.8 per cent and South Africa: -4.9 per cent), Nigeria has recorded the most sizeable sell-offs.

They said, “With uncertainty surrounding the upcoming elections and other external developments that have seemingly increased the allure of foreign assets, the Nigerian equity market has been on a southward trajectory for most of 2018.

“While the market pull-back began since the end of January, losses on the exchange appear to have intensified in recent time, with August recording the second largest month-on-month loss so far this year at 5.9 per cent and month-to-date losses in September already topping this figure at 7.2 per cent.”

They added that investor apathy for Nigerian securities was expected to keep the downward pressure on stock prices for the rest of 2018.

Analysts at Afrinvest Securities Limited described the Nigerian equities market as the worst-performing globally in the last few months as the rout on the market started at the tail end of January, making the market lose 27.3 per cent.

They said, “With no fundamental driver to boost investor sentiment on the horizon, we believe the current weak performance will persist, although we expect speculative trading to shape activities pending the completion of the general elections in 2019.”

They added that a technical analysis of the market made a case for a rebound this week, with the Relative Strength Index currently at 20.5, which was in the oversold region.

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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