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Yuletide: Stock Market Sell-off Worsens



Oscar Onyema
  • Yuletide: Stock Market Sell-off Worsens

Investors in the nation’s stock market have continued to sell off their holdings as Yuletide approaches.

The sell-off in the market strengthened last week as reflected by the dip in the index, which declined from 30,718.72 basis points on Tuesday to its lowest point during the week at 30,568.05 bps on Thursday.

The performance of the market last week was dragged by the sell-offs in heavily weighted stocks in the consumer goods and oil and gas sectors as they both closed negatively, declining by 2.79 per cent and 0.84 per cent, respectively.

The banking, insurance and the industrial goods sector indices were the only indices that registered upward movements during the week.

During the week, the bearish performance in the equities market dragged the All Share Index lower by 0.9 per cent to settle the year-to-date return at -19.80 per cent.

There were 33 gainers and 37 losers, which pegged the market breadth at 0.89x.

A total turnover of 1.169 billion shares worth N14.762bn in 14,554 deals was traded during the week by investors on the floor of the Exchange in contrast to a total of 1.107 billion shares valued at N11.192bn that exchanged hands in the previous week in 14,430 deals.

The financial services industry (measured by volume) led the activity chart with 983.374 million shares valued at N9.358bn traded in 8,484 deals, thus contributing 84.15 per cent and 63.39 per cent to the total equity turnover volume and value, respectively.

The banking sector, however, recorded an overall negative performance as it declined by 0.86 per cent, dragging its year-to-date return to -11.52 per cent.

However, the sector breadth at 1.60x was in favour of the bulls, as eight gainers outpaced five losers.

Union Bank of Nigeria Plc outperformed the sector with a share price increase of 14.02 per cent to close at N6.10.

Profit-taking prevailed in the banking sector as sell-offs dominated four of the top seven weighted counters in the sector. Consequently, the losses outweighed the gains recorded on eight counters.

Analysts at Meristem Securities Limited predicted a marginal gain in the sector this week as slight upticks were recorded across the sector’s heavyweight.

The healthcare industry followed with 44.802 million shares worth N183.753m in 253 deals.

The healthcare sector declined by 1.15 per cent to peg the year-to-date return at -21.40 per cent.

Neimeth International Pharmaceuticals Plc was the top gainer, with a share price increase of 3.45 per cent to close at 60 kobo.

Sell-offs in Fidson Healthcare Plc led to a negative close of the sector as the company emerged the top loser with a price decline of 6.12 per cent to close at N4.60.

The third place was occupied by the consumer goods industry with a turnover of 42.758 million shares worth N3.553bn in 2,227 deals.

At the close of the week, the consumer goods sector was awash with negative sentiment as it declined by 2.79 per cent, dragging its year-to-date loss to -26.33 per cent.

The consumer goods sector failed to sustain its bullish trend from the previous week, as selling pressures prevailed on large-cap stocks in the sector.

Cadbury Nigeria Plc was the best-performing stock with a share price gain of 5.82 per cent to close at N10.

On the losers’ end, Nestlé Nigeria Plc recorded the highest loss during the week with a 6.39 per cent decline.

The industrial goods sector advanced by 0.81 per cent, pegging its year-to-date return at -37.81 per cent. The sector breadth settled at 1.33x, as four gainers outpaced three losers.

Cap Plc emerged the highest gainer with an 18.25 per cent gain to close at N37.25 per share.

On the other hand, Cutix Plc led the losers’ chart, shedding 9.64 per cent to close at N1.78 per share.

At the close of the week, the notable gains on counters like Cap Plc and Berger Paints Plc drove the sector to a positive close.

The insurance index gained 0.20 per cent to settle the sector’s year to date loss at -11.90 per cent as four gainers and seven losers pegged the sector breadth at 0.57x.

The insurance sector outperformed other sectors this week, following modest gains on stocks like Continental Reinsurance Plc and Law Union and Rock Insurance Plc.

Veritas Kapital Assurance Plc closed at the top of the gainers’ list with a price increase of 19.05 per cent.

However, Cornerstone Insurance Plc led other laggards, following a decline of 9.09 per cent in its share price.

The oil and gas sector was characterised by bearish sentiment as it dipped by 0.82 per cent at the close of the week. This settled the year-to-date return at -15.59 per cent as the sector breadth closed at 0.75x.

Forte Oil Plc outperformed other stocks in the sector, after gaining 33.89 per cent to close at N24.10.

On the other hand, 11 Plc, Conoil Plc, Oando Plc and Seplat Petroleum Development Company Plc featured on the losers’ chart, closing at N156.60, N20.25, N4.95 and N594 per share, respectively.

Analysts at Meristem said the negative outing at the close of last week could be attributed to selling pressure on some of the sector’s heavily weighted counters, such as Seplat and 11 Plc.

Trading in the top three equities, namely Zenith Bank Plc, FBN Holdings Plc, and United Bank for Africa Plc (measured by volume) accounted for 438.938 million shares worth N5.691bn in 2,962 deals, contributing 37.56 per cent and 38.55 per cent to the total equity turnover volume and value, respectively.

The top five gainers last week were Forte Oil, John Holt Plc, Veritas Kapital, Cap Plc and Union Bank, which saw their prices gain 33.89 per cent, 20 per cent, 19.05 per cent, 18.25 per cent and 14.02 per cent, respectively.

The top five losers were 11 Plc, Conoil, Cutix Plc, Livestock Feeds Plc and Chams Plc, whose share prices declined by 10.41 per cent, 10 per cent, 9.64 per cent, 9.62 per cent and 9.09 per cent, respectively.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Banking Sector

Stanbic IBTC Reiterates Strategic Youth Agenda



Stanbic IBTC -

Determined to further strengthen the strategic position young Nigerians occupy in the country, Stanbic IBTC, a member of Standard Bank Group, has continued to promote various programmes to get Nigerian youths engaged and empowered for better productivity and participation in the development of the nation.

The Group aimed one of its initiatives, the ‘Youth Leadership Series’ (YLS), at deepening financial and entrepreneurial knowledge among Nigeria’s younger generations. The initiative, which was launched in 2018, is held in institutions of higher learning across the nation and brings together mentors from across various sectors of the economy to encourage and inspire the next generation. 

Dr. Demola Sogunle, Chief Executive of Stanbic IBTC Holdings, spoke of the initiative. He stated that through one of the organisation’s CSI pillars, ‘economic empowerment’, the YLS was birthed as an avenue to get young Nigerians engaged and empowered to become future business leaders.

He said that Nigerian youths required support, guidance, and empowerment to propel them to the pinnacle of their various fields, and added that innovative projects and tech disruptions championed by youths in virtually every sector have proved their ingenuity, skill, brilliance, and resourcefulness.

Sogunle further stated that since youths easily get distracted by different challenges, the organisation wanted to ensure that they were aptly and constantly guided, mentored, inspired, and motivated, not just to attain their goals but to actualise their full potentials.

This year’s event which held virtually attracted youths from across Nigeria and various parts of the world including the UK, USA and UAE. It featured an array of speakers – Debo Adebayo, better known as Mr. Macaroni and  Ms. Ifedayo Agoro, the founder of Diary of a Naija Girl (DANG), an online lifestyle website, who spoke on ‘Winning with Social Media’; the duo of Olumide Soyombo, co-Founder, Bluechip Technologies and Tracy Batta, co-Founder, Smoothie Express who spoke on ‘Winning with Entrepreneurship’; while Akin Bamidele Akintola, Head of Equity Sales, Stanbic IBTC Stockbrokers and Yanmo Omorogbe, co-founder of Bamboo Invest, an investment platform that allows Nigerians to invest in United States stocks, both spoke on ‘Winning with Investments’.

All speakers shared their entrepreneurial experiences, challenges, and success stories in these areas.

Speakers at previous editions of the YLS included Kechi Okwuchi, a survivor of the ill-fated Sosoliso plane crash of December 2005, who later went on to bag a First Class Degree from the University of Thomas Houston, Texas and emerged a finalist at America’s Got Talent; Member Feese, survivor of the United Nations Building bomb blast in Abuja and Cobhams Asuquo, renowned music producer, who was born blind.

Also, Stanbic IBTC Bank, in collaboration with Creative Youth Community Development Initiative (CYCDI), and Covenant University, Ota and in alignment with the 73rd session of the United Nations General Assembly (UNGA) in New York City, engaged Nigerian youths on better understanding of the United Nations (UN) Sustainable Development Goals (SDGs) and their role in its attainment.

The organisation also said that some needs of youths have been catered to with the Stanbic IBTC BluEdge Youth Account, targeted to help students and youths cultivate a savings culture very early in life.

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United Capital Launches 150 Billion Naira Infrastructure Fund




United Capital Plc today announced the launch of its 150 Billion Naira Infrastructure Fund.

The United Capital Infrastructure Fund (UCIF) is a Naira-denominated fund that aims to provide long-term financing for the delivery of critical infrastructure in Nigeria and Sub-Saharan Africa.

United Capital stated this in a disclosure statement released through the Nigerian Exchange Limited and obtained by Investors King on Monday.

The statement further said that the fund has been registered with the Securities and Exchange Commission as a close-ended fund.

The infrastructure deficit in Nigeria is growing at an alarming rate with the Central Bank of Nigeria (CBN) estimating that the Federal Government would need about US$100 billion annually to address the nation’s infrastructure deficit.

This infrastructural deficit is a major constraint to the economic development of Nigeria and the United Capital fund is set to address this deficit by financing infrastructure assets that cut across sectors such as power and renewable energy, transportation, agribusiness and industrial infrastructure, healthcare, technology, mass housing, urban and social infrastructure.

Stanbic IBTC also launched a N100 Billion infrastructure fund earlier in the year in an attempt to close the infrastructural gap in the country.

According to United Capital, the Infrastructure Fund would be managed by United Capital Asset Management Limited (“UCAML”), its only sponsor. The Fund has retained Africa Finance Corporation (AFC) as the independent Financial Advisor, to provide additional layers of best practice of corporate governance which enhances the project appraisal and due diligence activities of the Fund Management team.

Speaking at the launching, Mr. Peter Ashade, the Group Chief Executive Officer of United Capital Plc stated that “the journey to launch the Fund has taken almost two years, during which period extensive preparatory studies and appraisals were carried out to establish the business case for the Fund, as well as to define a model and governance framework that would provide investors that have an appetite for long-term financing products (such as pension funds and insurance companies), with sufficient confidence of the attractiveness of UCIF, as an investment opportunity.”

United Capital Plc is a financial services group with activities that include Investment Banking, Asset Management, Trustees, Securities Trading, Wealth Management and Consumer Finance. The Group is headquartered in Lagos, Nigeria, with operations and presence in West Africa.

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Banking Sector

United Bank for Africa (UBA) Sustains Profitability in Q3, 2021, Grows Profit by 34.59 Percent



United Bank for Africa Plc, one of the leading financial services providers in Nigeria, sustained profitability in the third quarter (Q3) ended September 30, 2021, according to the bank’s latest unaudited financial report released on Monday.

The lender’s interest income grew by 8.54 percent from N111.556 billion achieved in the third quarter of 2020 to N121.078 billion in the third quarter of 2021.

Interest expense moderated to N39.881 billion in the quarter under review despite the increase recorded in interest income. This represents an improvement of 12.47 percent when compared to the N44.858 billion filed in the corresponding quarter of 2020.

United Bank for Africa’s net interest income stood at N81.197 billion in Q3 2021, up by 21.73 percent from N66.698 billion recorded in Q3 2020.

The bank grew net fee and commission income by 25.40 percent from N17.663 billion in Q3 2020 to N22.150 billion in Q3 2021.

Similarly, the lender grew total non-interest income by 25.22 percent to N38.041 billion in the period under review, up from N30.377 billion achieved in the corresponding quarter.

Net operating income after impairment loss on loans and receivables jumped 22.8 percent to N119.970 billion, while the total operating expenses inched higher to N73.182 billion, an increase of 20.89 percent when compared to N60.533 billion filed in Q3 2020.

Profit before tax rose by 41.87 percent from N33.244 billion in Q3 2020 to N47.166 billion in Q3 2021. United Bank for Africa paid N3.152 billion in income tax in the third quarter of 2021.

Therefore, the bank’s profit after tax grew by an impressive 34.59 percent to N44.014 billion from N32.702 billion in Q3 2020. Earnings per share expanded from N0.70 in Q3 2020 to N1.25 in Q3 2021.

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