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Stock Market Remains Bearish

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  • Stock Market Remains Bearish

The stock market remained bearish in the first week of 2019 as investors continued to adopt cautious trading following persistent political jitters ahead of general elections next month.

The market, which recovered in 2017 after two years of decline to grow by 42.3 per cent, depreciated by 17.8 per cent in 2018.

Analysts attributed the negative performance of the market in 2018 to rising yields in the United States(US) due to hike in interest rates and the political uncertainties in the domestic economy in the build up to the 2019 elections amidst a sluggish growth in gross domestic product (GDP).

Given the fact that some of the factors still exist, the local bourse maintained a bearish trend last week with the Nigerian Stock Exchange (NSE) All-Share Index (ASI), shedding 1.28 per cent to close at 30,638.90. However, market capitalisation appreciated by 0.78 per cent to be at N11.426 trillion due to listing of additional shares of Cement Company of Northern Nigeria Plc.

All other indices finished lower with the exception of the NSE Oil and Gas Index that rose by 2.91 per cent. The NSE Industrial Index led decliners with 3.9 per cent, followed closely by the NSE Banking Index with 2.7 per cent. The NSE Consumer Goods Index and NSE Insurance Index went down by 1.0 per cent apiece.

Commenting on the market performance, analysts at Cordros Capital said: Our view continues to favour cautious trading in the equities market amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger. However, we expect positive macroeconomic fundamentals to drive recovery in the long term.”

The equities market may suffer more decline in the days to come as there is no indication of the return of foreign investors soon. Besides, local investors are still watching the polity and not willing to stake their money now until after the general elections.

The Acting Director General of the Securities and Exchange Commission (SEC) Ms. Mary Uduk had said a large percentage of investors in our market are foreign investors and their exit continued to impact negatively on the market.

“We can see that the impact of increase in interest rate in advanced countries not just US, has impact on capital outflow thereby leading to reduced performance in our markets. I want to say that the interest rate increase in advanced economies not just the US, does not affect only Nigeria but also affects other emerging and frontiers market in the world,” she said.

Also, analysts at CSL Stockbrokers said while prices of equities have depreciated significantly, it may be too early for investors to take advantage of the low prices.

They said: “Although, we acknowledge that the broad sell off in the market has led to a significant moderation in the share prices of stocks providing opportunities for bargain hunting, we think that the argument for “Buying the dip” frequently advanced by money managers and traders is still too early to call for.

“With growing concerns about a weakening global economy, the U.S Fed providing guidance for two rate hikes in 2019 and more importantly, the elevated political risk in the domestic economy, we expect foreign investors to remain on the sidelines. Hence, we still expect a choppy theme to characterize the nation’s bourse over the short term.”

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

CIBN, NIBSS Introduce e-Payment Certification Programmes

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NIBSS

CIBN, NIBSS Introduce e-Payment Certification Programmes

The Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with Nigerian Interbank Settlement Systems Plc (NIBSS) have introduced professional certification programmes on electronic payments for financial service providers and institutions.

Both organisations disclosed that the programme was designed to enhance the electronic payment skills and knowledge of financial practitioners in order to equip them with efficient tools and information required to upscale innovation and services.

Speaking to journalists at a media briefing in Lagos, yesterday, the Chief Executive Officer, Chartered Institute of Bankers of Nigeria, Mr. Seye Awojobi, said the initiative is an international programme, well grounded in the local realities of the Nigerian e-payment industry and captures the current dynamics, as well as aspects of digital financial services practices.

“This programme would set the standards for e-payment expertise in Nigeria; foster a category of high performing professionals in the industry and build a resilient, safe and secured payment technology driven platform.

“The curriculum for the programme adequately covers recent methods required, which are in line with global practices.

“The introduction of the scheme cannot be more timely than now considering the COVID-19 pandemic, which created serious disruptions in our professional and personal lives,” he added.

On his part, Chief Executive Officer, Nigerian Inter-Bank Settlement Systems Plc, Premier Oiwoh explained that the introduction of the programme would determine the capacity and work experience criteria required to recognise beginners, intermediate and advanced.

“It would create a growth roadmap for fledging e-payment workers, including the unemployed who has the desire to make a career in the electronic sector.

“Also, it would enable us continue to tackle the issue of insecurity within the financial technology payment and banking space,” he added.

The institutions also noted that in order to maintain a certification credential, the practitioners must earn some recertification credits over a three year span and valid for three years after it has been issued.

The CIBN last week has reintroduced its mentoring scheme. The initiatives aims at up-scaling the leadership capacity and productivity of workers within the financial and banking sector.

Speaking during the virtual forum, Director General, Securities and Exchange Commission, Lamido Yuguda, had explained that mentoring schemes are essential for the sustenance and development of the sector as it is built upon values such as trust and professionalism.

“These values can be taught. But are reinforced when practiced by the senior co-workers and emulated by junior colleagues. Such initiatives enable workers to avoid being distracted by the material, prestigious and monetary incentives the space presents.

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Finance

Stanbic IBTC Offers Low-Interest Agric Loans

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Stanbic IBTC Bank

Stanbic IBTC Offers Low-Interest Agric Loans

Stanbic IBTC Bank Plc has reaffirmed its commitment to the growth of Nigeria’s agriculture sector by supporting farmers and other players in the agricultural value chain.

As the demands on agribusinesses change seasonally, the financial institution provides financing solutions for agricultural enterprises to suit their requirements.

A statement explained that the needs range from availability of resources, to farming equipment, as well as enhancement of seasonal cashflow, amongst others.

Stanbic IBTC Bank offers various low-interest credit facilities across the agricultural sector that will help clients to cushion the impacts of the Covid-19 pandemic.

Speaking on this, Head, Agribusiness, Stanbic IBTC Bank, Wole Oshin, said the agribusiness financial solution was geared towards ensuring that players in the agriculture space are not hindered by lack of finance.

He said: “The bank’s suite of agribusiness solutions minimises risks, ensures maximum control and optimises profits associated with international trade by making transactions smoother, simpler and safer for all parties involved.

“Some benefits of the Stanbic IBTC Agribusiness Finance include: availability of gap-funding for unforeseen financial needs, maintenance of cash flow and flexibility of repayment terms based on the type of funding. This facility is also versatile and can be utilised for funding resources, vehicles and farming equipment.”

Oshin noted that agricultural enterprises could access overdraft to finance their short-term cash flow and working capital needs.

“With quick and flexible processes, funds are available when needed and interest is paid only on funds utilised, not on the full amount on which the limit is set,” he added.

He further reiterated that the asset finance solution could aid in the financing of all farming vehicle and implement needs, with a wide range of packages to suit business’ cash flow and tax requirements.

“Vehicles and assets such as tractors, harvesters, irrigation equipment and so on, to enhance production,” he said.

Other available facilities are Business Revolving Credit Loan, Agricultural Production Loan and Medium-Term Finance.

These are suitable for grain farmers, individual farmers, groups and entities in the agricultural sector. Our loans are designed to accommodate the purchase of various agricultural inputs (like seeds, fertilizers etc), livestock, agriculture-related products and asset acquisition.

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

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FMDQ Exchange Admits Parthian Partners’ N20bn Commercial Paper

FMDQ Securities Exchange has registered the Parthian Partners Limited N20 billion Commercial Paper (CP) Programme to its platform as part of its efforts to assist corporates access funds from the debt capital market (DCM).

The DCM has continued to witness significant activity among corporates seeking a viable avenue to raise capital to meet their financing needs.

According to the FMDQ, the registration of the CP programme strategically positions Parthian Partners Limited to raise short-term finance from the DCM with speed at a time in the future when it determines suitable, through CP issues within the CP Programme limit.

Parthian Partners provides competitive wholesale brokerage services in the African over-the-counter (OTC) markets, and trades in Federal Government of Nigeria (FGN)bonds and treasury bills, state government bonds, local contractor bonds, orporate bonds and eurobonds, providing regular market updates and liaising with market participants and regulators in the African markets to provide independent research on the African fixed income market.

FMDQ said in support of the growth and revitalisation of the Nigerian economy, it championed the resuscitation of the CP market to provide corporate and commercial businesses with the opportunity to meet their short-term funding requirements, whilst building their profiles within the Nigerian DCM.

“In addition to its commendable and efficient registration process, FMDQ Exchange, through its quotation service, will provide stakeholders and market participants with credible and real-time information as part of the exchange’s commitment to facilitate transparency in the fixed income market space,” it said.

Meanwhile, trading in the equities market closed in the green yesterday following buying interest in Zenith Bank Plc (+4.8 per cent), Flour Mills of Nigeria Plc (+6.2 per cent) and Guaranty Trust Bank Plc(+0.8 per cent). As a result, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.03 per cent to close at 40,164.86.

Zenith Bank Plc yesterday released its audited results for the year ended December 31, 2020, announcing a profit before tax (PBT) of N243.294 billion, up from N255.861 billion. Profit after tax (PAT) rose by 10.4 per cent to N230.565 billion from N208.843 billion in 2019.

Trading activity improved as volume and value advanced 16.8 per cent and 7.6 per cent to 338.0 million shares and N3.8 billion respectively. The most traded stocks by volume were FBN Holdings Plc (64.6 million shares), Zenith Bank (52.7 million shares) and Transcorp (42.0 million shares).

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