- Domestic Investors Invest N374.98 in Stock Market in Q1 2020
More domestic investors are taking advantage of the prevalent low prices in the Nigerian Stock Exchange (NSE), according to the latest report on Domestic & Foreign Portfolio Investment.
The report published by the exchange on Wednesday showed domestic investors invested N374.98 billion in the three months ended March 31, 2020.
A breakdown of the report revealed that a total sum of N165.14 billion was invested in January, while N77.16 billion and N132.69 billion were invested in February and March, respectively.
Further analysis indicated that domestic retail investors invested a combined N171.45 billion in the first quarter of the year, up from N98.1 billion recorded in the corresponding period of 2019. A total of N81.69 billion was invested in January, N29.56 billion was added in February and N60.23 billion in March.
Similarly, investment by domestic institutions rose from N100.29 billion in the first quarter of 2019 to N203.53 billion in the same quarter of 2020.
However, investment from foreign investors declined from N97.63 billion achieved in the first quarter of 2019 to N65.27 billion in the first quarter of 2020. Highlighting the impact of COVID-19 on the bourse and the economy at large.
While the total amount withdrew by foreign investors from the stock market during the period under review rose from N124.24 billion in the corresponding quarter of 2019 to N186.6 billion. The very reason the central bank devalued the Naira to slow down the surge in capital flight.
“The value of domestic transactions executed by Institutional Investors outperformed Retail Investors by 10 percent. A comparison of domestic transactions in the current and prior month (February 2020) revealed that retail transactions increased significantly by 103.72 percent from N29.56 billion in February 2020 to N60.22 billion in March 2020,” the report stated.
“Similarly, the institutional composition of the domestic market increased by 52.23 percent from N47.60 billion in February 2020 to N72.46 billion in March 2020.”
Financial Sector Grew by 6.8 Percent in the Third Quarter
The finance and insurance sector that comprises of both the financial institutions and insurance subsectors grew by 5.91 percent year-on-year in nominal terms in the third quarter (Q3).
According to the National Bureau of Statistics (NBS) latest report, the financial institutions’ subsector accounted for 88.89 percent of the sector in real terms in the quarter under review while the insurance subsector contributed the remaining 11.11 percent.
During the third quarter of 2020, the financial institutions’ subsector grew by 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019 despite COVID-19 and a tough operating environment. The insurance subsector, however, contracted by -18.67 percent in Q3 2020 from -29.53 percent in Q2 2020 and 3.96 percent in Q3 2019.
On a quarterly basis, the sector declined by 24.76 percent.
In terms of contribution to GDP, the finance and insurance sector contributed 2.46 percent in Q3 2020, higher than the 2.40 percent it represented a year ago and lower than the contribution of 3.76 percent achieved in the previous quarter.
The economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria is officially in the second economic recession in four years.
FBN Holdings Reports N21.9 Billion Profit in Q3 2020
FBN Holdings Plc reported net interest income of N61.463 billion in the third quarter of 2020, slightly down from N61.836 billion posted in the same quarter of 2019.
In the unaudited financial statement filed through the Nigerian Stock Exchange, FBN Holdings Net Interest income after impairment charge for losses also declined to N45.446 billion during the period under review, down from N55.483 billion filed in the corresponding quarter of 2019.
Fee and commission income grew from N26.988 billion in the third quarter of 2019 to N31.810 billion in the same quarter of 2020.
The surged in fee and commission bolstered operating profit to N21.738 billion, up from N18.223 billion filed in 2019.
Profit before tax stood at N21.910 billion in 2020 from N18.223 billion recorded in 2019. While profit after tax rose to N18.723 billion from N18.223 billion filed in the corresponding quarter of 2019.
The strong third quarter performance was not surprising given what the Group Managing Director of FBN Holdings Plc, Mr. UK Eke, told shareholders in the last AGM.
He said “in line with the commitment to supporting our customers and providing leadership in the financial services industry, we will continue to provide unfettered access to financial services to our customers and address their needs. We are working in line with the guidance of the regulators including the Central Bank of Nigeria (CBN) in providing access to funding as we seek to kick-start the economy and drive growth.”
He assured stakeholders that overall, “the impact on our business has been broadly in line with our expectations, and our resilience, breadth of offerings, and investment in alternative channels have ensured that the Group is able to cushion the effect and thrive.”
“More fundamentally, the Group has begun to reap the dividend of its investment in technology that has enhanced the earning capacity of the business and expanded our market reach,” Eke said.
Zenith Bank Sets a New Record, Posts N508.979 Billion Gross Earnings in Nine months
Zenith Bank continues its impressive run in the first nine months of the year despite COVID-19 and other business challenges that limited businesses operating in Nigeria.
The leading financial institution reported N508.975 billion gross earnings in the nine months ended September 30, 2020. This was 4 percent higher than the N491.268 billion posted in the same period of 2019.
The bank disclosed in the unaudited financial statements released through the Nigerian Stock Exchange (NSE).
Zenith Bank grew interest and similar income declined by 1 percent to N318.820 billion in 2020, slightly down from N321.938 billion.
Net interest income rose by 5 percent from N214.627 billion filed in 2019 to N225.179 billion in 2020.
Operating expenses expanded by 11 percent to N196.279 billion during the period under review, up from N176.941 billion filed in 2019.
Profit before tax grew by 1 percent from N176.183 billion in 2019 to N177.283 billion in 2020, while profit after tax declined by 6 percent to N159.315 billion, down from N150.723 billion achieved in the corresponding period of 2019.
Key Financial Highlights
In the press release that accompanied the unaudited financial statements, Zenith Bank said “Total deposits closed at ₦5.2 trillion at the end of Q3 2020 up from ₦4.3 trillion in December 2019, dominated by low-cost deposits. Retail deposits continued to grow strongly to ₦1.7 trillion at the end of Q3 2020 up from ₦1.1 trillion as at December 2019, underpinned by the continuous expansion and improvement of the Group’s digital platforms.
In terms of asset quality, the NPL ratio improved to 4.80% (FYE 2019: 4.95%), despite growing loans and advances by 17 % from ₦2.5 trillion as at December 2019 to ₦2.9 trillion at the end of Q3 2020, affirming the Group’s prudent credit risk management.
Our liquidity and capital adequacy ratios (CAR), at 67.4% (Bank: 52.5%) and 21.5% respectively at the end of Q3 2020, remain above regulatory thresholds of 30.0% and 15.0% respectively. This gives headroom for providing support to businesses while creating risk assets opportunities in line with our credit risk management framework.
Going into the final quarter of the year, we will remain resilient as we keep adapting to the headwinds in the operating environment and continue to deliver enhanced customers experience and stakeholders value.
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