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10 Companies Control 71% of NSE Equities Market Capitalisation



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  • 10 Companies Control 71% of NSE Equities Market Capitalisation

Ten companies, led by Dangote Cement Plc, account for 71 per cent of the market capitalisation of the equities listed on the Nigerian Stock Exchange (NSE), investigation has shown.

Hence, any change in the share price of any of the 10 companies affects the level of the market capitalisation and direction of the market.

The market capitalisation of the equities refers to the value of all the 168 equities listed on the NSE, which stood at N11.797 trillion as at Monday.

However, an analysis of the capitalisation showed that the 10 companies account for N8.49 trillion. Dangote Cement Plc has the highest capitalisation of N3.322 trillion or 28 per cent. Nestle Nigeria Plc occupied the second position with N1.173 trillion, followed by Guaranty Trust Bank Plc (GTBank Plc) with N1.098 trillion.

Zenith Bank Plc accounts for N714.270 billion, just as Nigerian Breweries Plc and Stanbic IBTC Holdings Plc account for N594.682 billion and N480 billion respectively. Seplat Petroleum Development Company Plc and FBN Holdings Plc’s capitalisation stood at N330.271 billion and N294.341 billion in that order. United Bank for Africa Plc and Ecobank Transnational Incorporated account for N250.658 billion and N235.677 billion respectively.

Market operators said these stocks, most of the time, determine the direction of the market because of their level of market capitalisation, noting that that is why they are often referred to as bellwethers.

Investors are always attracted to the stocks because they pay dividend regularly. Five of the companies have already announced dividends for the year ended December 31, 2018. They are Dangote Cement Plc, Zenith Bank Plc, GTBank Plc, Nestle Nigeria Plc and Stanbic IBTC Holdings Plc.

Dangote Cement recommended a dividend of N16 per share. The cement firm posted a revenue of N901.21 billion in 2018, up from N552.36 billion in 2017. Profit after tax stood at N390.32 billion, up from N204.25 billion while earnings per share rose from N11.65 to N22.83. Hence, the company directors are proposed a dividend of N16 per share.

Zenith Bank posted profit before tax (PBT) of N231.685 billion, up from N199.319 billion while profit after tax (PAT)stood at N193.424 billion from N173.791 billion in 2017. The directors recommended a final dividend of N2.50 per share which in addition to the N0.30 per share paid as interim dividend amounts to N2.80 per share, compared to N2.70 in 2017.

GTBank ended the year with PBT of N215.6 billion, representing a growth of 9.1 per cent over N197.7billion recorded the previous year, while PAT stood at N184.639 billion compared with N167.913 billion posted in 2017. The bank proposed final dividend of N2.45 per share in addition to interim dividend of 30 kobo bringing total dividend for 2018 financial year to N2.75. GTBank expects profit growth to slow in 2019 from last year.

The bank in its full year 2018 financial performance review posted on its website, disclosed that its balance sheet is well structured, with strong earnings capacity as interest earning assets and non-interest earning assets accounted for 70 per cent and 30 per cent respectively. It pointed out that the bank has a well-diversified and improved funding source with low cost deposits accounting for 84 per cent of its deposit base.

Also, Nestle Nigeria Plc posted PBT of N59.75 billion in 2018, an increase of 27.5 per cent from N46.83 billion in 2017, while PAT grew from N33.72 billion to N43 billion in 2018. The board of directors has recommended a final dividend of N38.50 per share and having paid an interim dividend of N20 per share before now, the total dividend for the 2018 would be N58.50 per share.

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.

Crude Oil

A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site



Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.

Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.

A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.

One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.

However, Saudi authorities are yet to confirm or respond to the story.


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Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday



Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts




Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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