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Investors’ Wealth Increases as Stock Market Gains N50bn

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Oscar Onyema
  • Investors’ Wealth Increases as Stock Market Gains N50bn

Investors’ in the Nigerian stock market recorded a N50bn increase in their wealth on Wednesday as the market extended its bullish run into the second consecutive day after the rebound on Tuesday.

The market capitalisation of equities listed on the Nigerian Stock Exchange, which stood at N11.320tn on Tuesday, increased to N11.372tn amid weak investor sentiments.

The All Share Index increased by 0.47 per cent to settle at 31,151.68 basis points, moderating the year-to-date loss to -18.5 per cent.

At the end of trading on the floor of the Exchange on Tuesday, 19 gainers emerged against 18 losers recorded, while investor sentiment weakened to 1.1x from 1.8x recorded on Tuesday.

Analysts at Afrinvest Securities Limited said bargain hunting in Dangote Cement Plc towards the final seconds of trading on Wednesday drove the market higher as the domestic equity market closed bullish.

They said price appreciation in Dangote Cement and Stanbic IBTC Holdings Plc drove the All Share Index and market capitalisation higher, thereby improving investors’ wealth.

“Weak investors sentiment in Wednesday’s session shows that buying momentum is tapering; thus, we anticipate a negative performance in subsequent trading session,” they added.

Activity level, however, strengthened as volume and value traded increased by 0.1 per cent and 9.2 per cent, respectively, to close at 198.637 million units and N2.309bn, respectively.

The top traded stocks by volume were FBN Holdings Plc (90.4 million units), Access Bank Plc (17.9 million units) and Diamond Bank Plc (15.1 million units), while the top traded stocks by value were FBN Holdings (N689.8m), Stanbic IBTC Holdings (N334.1m), and Nestlé Nigeria Plc (N316.0m).

Performance across sectors was largely bearish as three of five sectors closed in the red.

Bargain hunting drove the Industrial Goods index higher by 0.85 per cent as price upticks in Dangote Cement pushed the index higher.

Dangote Cement had a N5 gain, the highest gain in value on the gainers table.

The Insurance index trailed as price appreciation in Wapic Insurance Plc and Linkage Assurance Plc propelled the index higher by 0.58 per cent.

On the flip side, the banking index lost the most, down by 1.02 per cent, while the oil & gas index followed, losing 0.61 per cent.

Similarly, the consumer goods index closed southwards for the third consecutive session as sell pressures in its stocks dragged the index 0.18 per cent lower.

The top five gainers were Veritas Kapital Assurance Plc, Diamond Bank Plc, Linkage Assurance, Wapic Insurance and Lasaco Assurance Plc, which saw their respective share prices gain 10 per cent, 8.97 per cent, 8.93 per cent, 8.11 per cent and 7.41 per cent.

The top five losers were Cement Company of Northern Nigeria Plc, Trans-Nationwide Express Plc, Prestige Assurance Plc, First Aluminium Nigeria Plc and Mutual Benefits Assurance Plc, whose share prices depreciated by 9.72 per cent, 9.23 per cent, 9.09 per cent, 9.09 per cent and 8.70 per cent, respectively.

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.

Finance

Global Credit Rating Affirms Sovereign Trust Insurance A Rating

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insurance

Global Credit Rating Affirms Sovereign Trust Insurance A Rating

Global Credit Rating, an international rating agency based in South Africa, has affirmed Sovereign Trust Insurance Plc A rating in its latest report released for the month of December 2020.

In a statement released through the Nigerian Stock Exchange (NSE), Global Credit Rating noted “that the Company has shown a great deal of consistency in her claims paying obligations to her numerous customers spread all over the country.

The Report further stated that “the listing of the Rights Issue in 2019 helped in increasing the Shareholders’ funds of the Company by 33.8%, to N7.8b by the end of the Financial year in 2019 as against the figure of N5.8b in 2018.

“Subsequently, by the third quarter of 2020, the Shareholders’ funds had increased to N8.2b which also translated to a 31% increase in the corresponding period of 2019 with a figure of N6.3b. In the Rating Agency’s opinion, Sovereign Trust Insurance Plc is strong in liquidity with more than adequate claims coverage that compares well to industry averages.

“The capital adequacy of the Underwriting Firm is considered strong according to the rating report and this is underpinned by the sizeable capital base catering for the quantum of insurance and market risks assumed. In this regard, the ratio of Shareholders’ funds to NEP, (Net Earned Premium) improved to 189.2% in the Q3 of 2020 as against 130.9% in the corresponding quarter of 2019.

In terms of peer-to-peer performance comparison, “Sovereign Trust Insurance Plc did very well when compared with other selected insurers in terms of Capital, Total Assets, Gross Premium Income (GPI) and Net Premium Income (NPI).”

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Banking Sector

Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 25.7 Billion in 2020

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Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 25.7 Billion in 2020

South Africa – Refinitiv today released the 2020 investment banking analysis for the Sub-Saharan African. According to the report, an estimated US$523.7 million worth of investment banking fees were earned in Sub-Saharan Africa during 2020, down 15% from 2019 and the lowest annual total in six years.

Fee declines were recorded across M&A advisory, debt capital markets underwriting, and syndicated lending.  Advisory fees earned from completed M&A transactions generated US$108.3 million, down 55% year-on-year to the lowest level since 2013.  Debt capital markets underwriting fees declined 13% to US$64.9 million, a four-year low, while syndicated lending fees fell 3% to US$263.0 million. Equity capital markets underwriting fees totalled US$87.5 million, almost three-times the value recorded during 2019.

Fees generated in the energy & power sector account for 26% of total investment banking fees earned in the region during 2020, up from 10% during the same period last year, while the financial and technology sectors account for 17% and 13% respectively.  South Africa generated the most fees in the region, a total of US$279.9 million accounting for 53%, followed by Mozambique with 14%. Boosted by lending fees, Sumitomo Mitsui Financial Group earned the most investment banking fees in the region during 2020, a total of US$57.3 million or an 11% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$25.7 billion during 2020, 62% less than the value recorded during 2019 when Naspers’ US$35.9 billion internet assets spin-off boosted merger activity to an all-time high.  The value of deals recorded during 2020 is the lowest annually since 2012.  The number of deals declined 5% from last year to a seven-year low.

The value of deals with a Sub-Saharan African target declined 39% to a sixteen-year low of US$12.5 billion as domestic M&A within the region declined 44% from last year and the combined value of inbound deals reached just US$7.1 billion, the lowest annual total since 2009.

Chemicals company Sasol agreed to sell a US$2.0 billion stake in LyondellBasell in October, the largest deal in the region during 2020.  Boosted by this deal, materials was the most active sector for deal making during 2020, accounting for 23% of Sub-Saharan African target M&A activity, followed by energy & power (19%) and technology (17%).  South Africa was the most targeted nation, followed by Uganda. Outbound M&A reached a three-year high of US$6.0 billion during 2020, 13% more than the value recorded during 2019.  The value was boosted by Angolan state-owned Sonangol’s purchase of PT Ventures from Africatel Holdings for US$1.0 billion and Templar Investments’ US$1.0 billion offer for Jindal Steel’s Oman unit. With advisory work on twenty deals worth a combined U$4.4 billion, JP Morgan holds to the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during 2020.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached US$2.5 billion during 2020, 54% more than the value recorded during the previous year, but lower than every other annual total since 2005.  The number of deals recorded increased 19% from 2019 but was lower than any other yearly tally since 2012.  One initial public offering was recorded during 2020, compared to three in 2019.  Malawian telecoms company, Airtel Malawi, raised US$28.7 million on the Malawi Stock Exchange in February. JP Morgan took first place in the Sub-Saharan African ECM underwriting league table during 2020.

DEBT CAPITAL MARKETS

The African Development Bank raised $3 billion in a “Fight Covid-19” social bond at the end of March to help alleviate the economic and social impact the Coronavirus pandemic will have on livelihoods and economies in the region.  With this deal, and Ghana’s US$3 billion Eurobond in February, Sub-Saharan African debt issuance totalled US$8.9 billion during the first quarter of 2020, the second-highest first quarter DCM total in the region of all-time.  Only US$1.9 billion was raised during the second quarter, the lowest quarterly total in eight years, followed by US$4.0 billion during the third quarter.  Prosus raised US$2.2 billion in December, boosting fourth quarter bond issuance in the region to US$4.3 billion.  The total proceeds raised during 2020 is US$19.0 billion, down 30% from last year and a four-year low.

Deutsche Bank took the top spot in the Sub-Saharan African bond underwriter ranking during 2020 with US$2.6 billion of related proceeds, or a 13% market share.

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Finance

DF Holdings Limited Purchases 474,603,596 Shares of AIICO

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AIICO insurance

DF Holdings Limited Purchases 474,603,596 Shares of AIICO

A majority shareholder in AIICO Insurance Plc, DF Holdings Limited, has increased its stake in the company by purchasing additional shares of 474,603,596.

In a disclosure statement published through the Nigerian Stock Exchange (NSE) and signed by Donald Kanu, the Company Secretary, AIICO, DF Holdings Limited purchased the shares on 31, December 2020 from the Nigerian Stock Exchange in Lagos Nigeria.

The 474,603,596 shares were purchased at N1.17k per share. Meaning, DF Holdings Limited invested N555.286 million in AIICO Insurance. See the details below.

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