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Stock Market Participation Drops Amid Fluctuations

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  • Stock Market Participation Drops Amid Fluctuations

The participation of investors in the nation’s stock market has reduced drastically amid the incessant fluctuations in recent times.

An analysis of the weekly performance of the Nigerian Stock Exchange showed that the market participation dropped by 7.67 per cent last week and a further 8.05 per cent at the end of trading on Monday.

The NSE, in its weekly market report, stated that a total turnover of 1.107 billion shares worth N11.192bn in 14,430 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.199 billion shares valued at N14.277bn that exchanged hands in 15,841 deals in the previous week.

Gains recorded on Friday were reversed on Monday as the All-Share Index and market capitalisation depreciated by 0.82 per cent to close at 30,614.73 basis points and N11.176tn, respectively.

Performance across sectors was totally bearish as all indices closed in the red.

The Consumer Goods index declined the most, losing 2.32 per cent following sell pressures in Nestlé Nigeria Plc, Nigerian Breweries Plc and UACN Plc.

The Oil & Gas index trailed, shedding 1.19 per cent as a result of the losses recorded in 11 Plc and Oando Plc.

Similarly, the Insurance index depreciated by 0.74 per cent due to profit taking in Cornerstone Insurance Plc and Mutual Benefits Assurance Plc.

The Banking index declined by 0.39 per cent on the back of profit taking in Zenith Bank Plc, Stanbic IBTC Holdings Plc and Guaranty Trust Bank Plc.

The Industrial Goods index declined by 0.25 per cent as a result of the price decline recorded in the share price of Lafarge Africa Plc.

Fourteen equities appreciated in price against 25 losers, which weakened the market breadth to 0.6x.

The top five price gainers were Trans-nationwide Express Plc, Forte Oil Plc, Vitafoam Nigeria Plc, Sterling Bank Plc and United Bank for Africa Plc, whose share prices appreciated by 8.47 per cent, 6.39 per cent, 5.52 per cent, 3.57 per cent and two per cent, respectively.

The top five losers were Livestock Feeds Plc, Cornerstone Insurance, Mutual Benefits, 11 Plc and UACN, which saw their respective share prices decline by 9.62 per cent, 9.09 per cent, 8.70 per cent, 8.47 per cent and seven per cent.

Analysts at Meristem Securities Limited said the market performance was dragged by profit taking activities in line with their expectations.

“Nevertheless, we envisage some buying interest to resurface in subsequent trading sessions,” they added.

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.

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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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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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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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