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Stock Market Records Decline in Investors’ Participation

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Egypt Stocks
  • Stock Market Records Decline in Investors’ Participation

The nation’s stock market saw a reduction in the participation of investors last week.

The market, which gained N36bn last week, compared to the N325bn loss of the previous week, saw a decline in market participation as volume and value of trade dropped by 31.42 per cent and 39.46 per cent, respectively.

The All Share Index advanced by 0.31 per cent to settle at 32,049.73 basis points, thereby pegging the year-to-date return at 1.57 per cent.

Market breadth settled lower at 0.65x as the market recorded 23 gainers and 37 losers.

In the course of the week, Guaranty Trust Bank Plc, Stanbic IBTC Holdings Plc, Nestlé Nigeria Plc and Seplat Petroleum Development Company Plc released their 2018 financial year results.

Analysts at Meristem Securities Limited said the activities were buoyed by the release of companies’ results, which showed positive performance and the attractive dividend payment proposed by the firms.

They said, “Also, with the presidential elections already held, the political uncertainty in the system moderated. Consequently, buying pressures prevailed as investors sought to take a position, owing to the low valuation of counters across the market.”

Analysts at Vetiva Capital Management Limited said the mixed trading in the equities market was driven by investor apathy, which prevailed from midweek to week close.

Interests in the banking sector drove positive activity last Monday, with the ASI rising by 95bps. Positive activity continued on Tuesday, but at a weaker level, as the market climbed 14bps higher.

However, by Wednesday, sentiment had turned tepid, with sell-offs in the industrial goods and oil and gas sectors dragging the ASI to a -16bps close.

Sentiment remained tepid on Thursday despite the financial result released by GTB, which showed a four-per cent increase in top-line year-on-year, a 10 per cent increase in profit after tax and a dividend yield of 7.3 per cent.

Investors’ reaction to this and other earnings releases was muted as the ASI shed 22bps. Sentiment failed to improve at week close, with the consumer goods sector dragging the bourse on Friday.

However, buoyed by positive closes at the start of the week, the ASI ended the week 31bps higher.

The banking sector reversed its bearish course as it gained 3.37 per cent, improving its year-to-date return to 6.94 per cent.

Wema Bank Plc led the gainers’ table, advancing by 11.69 per cent to close at 86 kobo, while Sterling Bank Plc led the losers.

The consumer goods sector continued its bearish streak as it lost 0.98 per cent, dragging the year-to-date return to -1.11 per cent.

After a four-week bullish run, bearish investor sentiment returned to the insurance sector as its index dipped by 1.30 per cent, dragging its year-to-date return to 3.53 per cent.

The industrial goods sector gained 0.93 per cent during the week, recovering from losses recorded in the previous week to settle the year-to-date return at 3.12 per cent.

The oil and gas sector sustained its downturn from last week, dipping by 2.56 per cent. Consequently, the year-to-date return dragged further to settle at -3.44 per cent.

While there were no gainers in the oil and gas sector last week, four losers emerged, led by Japaul Oil and Maritime Services Plc.

“Following a tepid week driven by investor apathy and barring any political unrest, we foresee tepid activity, with the possibility of bargain-hunting. We also expect further earning releases drive a bit of interest in the equity market,” analysts at Vetiva said.

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

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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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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