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Capital Market Needs More Support, Says Analysts

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  • Capital Market Needs More Support, Says Analysts

Analysts at Vetiva Capital Management Limited have said there is a dearth of sustainable catalysts to support the nation’s capital market.

Investors in the market lost a total of N78.1bn last week as the market capitalisation of equities listed on the Nigerian Stock Exchange dropped to N13.154bn on Friday from N13.232bn the previous week.

The All Share Index broke its 30,000 points support level on Monday last week as the losses, which began the previous week, continued, taking the year-to-date losses to -5.02 per cent, compared with a loss of 29 basis points in the corresponding period last year.

During the week, there were days where several sectors closed in the green but their gains were overwhelmed by the negative performance of heavyweights, which dragged the overall performance.

Nestlé Nigeria Limited and MTN Nigeria Communications Plc traded negative, closing at N1,350 and N130, respectively.

A total turnover of 7.476 billion shares worth N91.107bn in 17,192 deals was traded last week by investors on the floor of the Exchange in contrast to a total of 868.739 million shares valued at N15.792bn that exchanged hands the previous week in 12,201 deals.

The financial services industry (measured by volume) led the activity chart with 6.121 billion shares valued at N17.460bn traded in 8,479 deals, thus contributing 81.87 per cent and 19.16 per cent to the total equity turnover volume and value, respectively.

Stocks in the financial services sector remained the most actively traded by value, with Guaranty Trust Bank Plc accounting for a significant portion of it.

The oil and gas industry followed with 1.002 billion shares worth N65.058bn in 2,019 deals.

The Information and Communications Technology industry recorded a turnover of 115.320 million shares worth N3.387bn in 866 deals.

The consumer goods sector was the worst performer last week, down by 164bps week-on-week and with a loss of -19.49 per cent year-to-date.

The banking sector, which appreciated by 253bps week-on-week, and the industrial goods sector, which appreciated by 317bps week-on-week, closed as the best-performing sectors.

Analysts at Vetiva said current share prices still presented an attractive entry point for investors, while analysts at Afrinvest Securities Limited said they expected investors to take positions in fundamentally sound stocks as the half-year earnings season was approaching.

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

CBN to Extend Credit Risk Management System to OFIs

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In an effort to curb growing bad debt, the Central Bank of Nigeria has said it will extend its Credit Risk Management System to Other Financial Institutions (OFIs) operating in Nigeria to protect them from bad debtors.

According to the apex bank, this is important following the successful implementation of the credit risk system in other lending institutions operating in Nigeria.

The bank disclosed this in a circular titled ‘Credit Risk Management System: Commencement of enrolment of all Development Finance Institutions, Microfinance Banks, Primary Mortgage Banks and Finance Companies’ and signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, on Monday.

In part, the circular read, “As part of efforts to promote a safe and sound financial system in Nigeria, the CBN introduced the CRMS to improve credit risk management in commercial, merchant and non-interest banks as well as to prevent predatory borrowers from undermining the banking system.

“With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrolment of Other Financial Institutions on the CTMS platform.

“Accordingly, all DFIs, MfBs, PMBs and FCs are required to report all credit facilities (principal and interest) to the CRMs and to update same on monthly basis.

“OFIs shall note the Bank Verification Numbers and Tax Identification Numbers are the only basis for regulatory renditions”.

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Banking Sector

BoI Grows Assets by 78.8% to N1.86 Trillion

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The Bank of Industry Group concluded the 2020 financial year with a 78.8 per cent growth of assets from N1.04tn to N1.86tn between 2019 and 2020.

A statement by the bank on Monday said the increase was driven to a large extent by the successful debt syndication of €1bn and $1bn that were concluded in March and December 2020 respectively.

BoI stated that the group’s financial statement demonstrated resilience and strength, noting that the period had significant challenges in the operating environment on account of the impact of COVID-19 pandemic on the economy.

“It also indicates synergy with the various interventions developed by the Federal Government, the Central Bank as well as other strategic partners towards ameliorating the impact of the pandemic on Nigerian enterprises,” the statement said.

The group’s total equity increased by 14.8 per cent from N293.08bn in the previous year to N336.48bn in 2020.

It added that as a reflection of the adverse impact of the challenging operating environment on growth of new facilities, loans and advances grew marginally in 2020 by 1.3 per cent to N749.84bn from the 2019 position.

The bank explained that this was largely due to the economic slowdown in the year as well as the various interventions and support initiated by the bank for its customers.

“The bank reviewed and restructured all its managed projects under the CBN intervention programme with interest rate reduction from nine to five per cent per annum for a period of one year and moratorium extension of three months (with a possible extension up to 12 months),” it said.

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Banking Sector

TAJBank Deploys NQR Solution To Ease Customer Transactions

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TAJBank, Nigeria’s non-interest bank, has announced the deployment of the NQR Payment solution, an indigenous Quick Response Code (QRC) by the Nigeria Interbank Settlement Scheme (NIBSS), for merchants and customers as the newest addition to its innovative e-business channels.

The NQR Payment solution is a secure QR-code-based payments and collections platform developed for merchants and customers to receive and make payments for goods and services in a quick, easy, contactless and secure manner.

A statement signed by the Founder/Chief Operating Officer of the bank, Mr. Hamid Joda, indicated that the ingenious solution would further drive TAJBank’s culture of innovation and create a seamless payment experience for its rapidly growing individual and corporate customers in their banking transactions.

“We are excited to have this payment channel introduced into the nation’s financial system as an addition to other innovative solutions we have deployed over the past few months.

This is a proof that, as we have said in our communications signature line, TAJBank’s interest is always in our customers”, Joda enthused.

In his remarks, the non-interest lender’s Chief Marketing Officer/Co-Founder, Mr. Sherif Idi, also maintained that the deployment of the NQR payment solution would revolutionize the e-payment experience and open new frontiers for small, medium and large scale businesses who are major stakeholders of the bank.

Since it commenced operations in the non-interest banking segment of the financial services industry, TAJBank is noted for its impeccable track record of growth and innovation, rendering exceptional quality services to customers.

The lender’s NQR solution is open to all customers of the bank, both merchants and individuals, across all its branches and digital channels globally.

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