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Conoil Declares Final Dividend of 200 Kobo for 2019 FY

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Conoil filling station

Conoil Announces a  Final Dividend of 200 Kobo per 50 Kobo Ordinary Share

Conoil Plc, Nigeria’s indigenous oil marketing company, on Wednesday declared a final dividend of 200 kobo per 50 kobo ordinary share for the financial year ended 31, December 2019.

In a statement published by the company on the Nigerian Stock Exchange website, the company said registration of shareholders will be closed between Tuesday 14th to Friday 17th of July, 2020. Therefore, the qualification date is Monday 13, July 2020.

Conoil stated that the dividend would be disbursed electronically ‘on a date to be announced’ soon. However, the company said the dividends would only be paid directly to the bank accounts of those whose names appeared on the mandated Registrar.

“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 the website: https://meristemregistrars.com/wp-content/uploads/2019/07/MeristemRegistrars_bank-Mandate-Form.pdf complete and submit to the Registrar or their respective Banks. The link to view Annual reports from their website is https://meristemregistrars.com/annual-reports/

Also, “Shareholders with dividend warrants and share certificates that have remained unclaimed, or are yet to be presented for payment or returned for validation are advised to complete the e-dividend registration or contact the Registrar,” Conoil stated.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigerian Exchange Limited

NGX All Share Index Climbs to 99,966.28 Points

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Limited (NGX) rebounded on Monday as the All Share Index (ASI) rose by 0.30%, closing at 99,966.28 points.

This positive development came after a five-day streak of negative closes, bringing renewed optimism to the market.

Investors saw N168 billion gains with stock market capitalization increasing from the previous low of N56.440 trillion to N56.608 trillion.

Among the standout performers were stocks such as Ikeja Hotel, Cutix, RedStar Express, and Sunu Assurances.

Ikeja Hotel saw its stock price rise from N6.35 to N6.95, adding 60 kobo or 9.45%. Cutix experienced an impressive increase from N4.62 to N5.08, gaining 46 kobo or 9.96%.

RedStar Express moved up from N4.05 to N4.38, an increase of 33 kobo or 8.15%, while Sunu Assurances rose from N1.19 to N1.29, adding 10 kobo or 8.40%.

The market’s positive return year-to-date (YtD) increased to 33.70%, though there has been a slight decrease of 0.09% in the month-to-date performance.

Despite this, the overall sentiment remains optimistic, with investors hoping for continued positive momentum.

GTCO, Access Holdings, FCMB Group, Japaul Gold, and UACN were among the most actively traded stocks.

A total of 362.42 million shares worth N7.367 billion were exchanged in 8,405 deals, showcasing robust trading activity and investor interest.

Market analysts attribute the rebound to renewed investor confidence and positive sentiments surrounding key stocks.

“The significant gains in major stocks like Ikeja Hotel and Cutix have boosted investor morale, leading to a broader market recovery,” said a market analyst.

The Nigerian stock market’s recovery comes amid a challenging economic environment, with investors closely monitoring developments both locally and globally.

The positive performance of the NGX ASI on Monday serves as a beacon of hope for market participants, indicating potential stability and growth in the coming weeks.

As the market continues to respond to economic indicators and corporate earnings reports, investors will be keenly watching for sustained positive trends and opportunities for profitable investments.

The NGX’s performance on Monday sets a promising tone for the rest of the week, with market participants eagerly anticipating further gains and stability in the Nigerian stock market.

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Bonds

Corporate Bond Issuance by Nigerian Companies Plummets 98% Amid High Yield Demands

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Bonds- Investors King

The value of corporate bonds issued by Nigerian companies has dramatically decreased by 98% between the last quarter of 2022 and the first quarter of 2024, according to recent data from FMDQ Securities Exchange Limited.

This significant drop is attributed to high yield demands from investors, reflecting a cautious stance in the lending market.

In the first quarter of 2024, the value of corporate bonds fell to N5.5 billion from N249.4 billion in Q4 2022, marking a staggering N244 billion decrease.

Similarly, the issuance of commercial papers (CPs) by firms also saw a sharp decline, dropping to N331.81 billion in Q1 2024 from N537.47 billion in Q1 2023, representing a 38% slump over the period.

Corporate bonds and commercial papers are crucial financial instruments used by companies and governments to raise capital for various projects.

While bonds typically offer periodic coupon payments, CPs do not provide such payments, making them less attractive in a high-yield environment.

Opeyemi Babalola, portfolio manager at Comercio Partners Asset Management, explained, “Companies are reluctant to take on debt at these levels. When one-year Nigerian Treasury Bills (NTBs) yields are at 25 percent, these companies would have to issue commercial papers at a premium to that.”

He noted that some companies have issued commercial papers at rates above 30%, which is unsustainable for maintaining profit margins.

On the corporate bond side, Babalola added, “There has hardly been any recent issuance because it’s not very prudent for any chief financial officer to advise their company to lock in long-term debt at the current high-yield levels.”

The sharp rise in yields on both government and private instruments in Nigeria’s fixed income market is a result of the Central Bank of Nigeria (CBN)’s aggressive monetary policy stance.

The CBN has been focusing on reducing financial system liquidity and hiking interest rates to curb inflation.

Consequently, the yield on one-year Nigerian treasury bills rose to 26.76% in March 2024 from 9% in January 2024, peaking at 27.33% in March 2024.

To tackle rising inflation, the Monetary Policy Committee, led by Yemi Cardoso, has raised interest rates three times this year by a total of 750 basis points.

This included an initial 600 basis point increase to 24.75% from 18.75% last year, followed by a 150 basis point increment to 26.25% in May 2024.

Several companies, including Afrinvest West Africa Limited, FBN Quest Merchant Bank, UAC of Nigeria, and Coleman Technical Industries Limited, issued CPs in the first quarter of 2024.

These issuers were primarily from the financial services, agriculture, manufacturing, health, pharmaceuticals, and retail sectors.

Another popular financing option for Nigerian companies is bank loans. Currently, commercial bank loan rates range from 30% to 40%, reflecting the high borrowing costs due to the central bank’s policy actions.

Gbolahan Ologunro, portfolio manager at FBNQuest, noted that while it is relatively cheaper for companies to raise funds through bond issuances or commercial papers compared to loans, the macroeconomic environment has reduced the appetite for such fundraising activities.

“The cost has gone up, and the macroeconomic situation does not support such attractive returns on investment, given the high level of cost associated with fundraising activities,” Ologunro said.

The running costs for businesses are increasing, and companies are struggling to raise prices without affecting demand.

“The purchasing power of consumers is declining because of rising inflation. So, it puts these companies in a very delicate position. You will see all these reflected in the earnings of publicly listed companies in the consumer space once we enter peak results season by the end of July,” Babalola added.

FMDQ data shows that corporate bonds’ value declined by 88% to N5.50 billion in Q1 2024 from N43.50 billion in Q4 2023.

Coronation Research predicts that short-term rates for T-bills and commercial papers will remain high for the rest of the year, without causing bond rates to rise significantly.

Joshua Joseph, fixed-income analyst at CSL Stockbrokers Limited, attributed the decline in private borrowing to economic uncertainty and high business costs.

He explained that the increased credit risk has led investors to demand higher premiums, making bank loans a more attractive option despite their high rates.

“As a result of this high cost of borrowing, interest expense is at high levels, and companies that can’t fully pass the cost to end consumers might be declaring huge losses,” Joseph added.

The Nigerian corporate bond market faces significant challenges as companies navigate the high-yield environment and rising borrowing costs.

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Nigerian Exchange Limited

Nigerian Equities Market Dips by 0.35% in Volatile Trading Week

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Nigerian Exchange Limited - Investors King

In the trading week ended Friday, July 12, Nigeria’s equities market dipped by 0.35% with the Nigerian Exchange Limited (NGX) All Share Index (ASI) and Market Capitalisation decreasing to 99,671.28 points and N56.44 trillion, respectively, from the previous week’s close of 100,022.03 points and N56.58 trillion.

The market saw only one session of positive close, while the rest were negative, resulting in a loss of approximately N140 billion for investors.

This downturn in the equities market comes as a surprise to many who were expecting a more robust performance due to the upcoming second quarter (Q2) results filings and corporate actions anticipated to drive investor interest.

Despite these expectations, the overall sentiment among investors remained tepid, reflecting broader economic uncertainties.

During the review week, buy-side activities favored oil & gas and industrial stocks. However, banking, consumer goods, and insurance sectors saw a significant number of sell-offs.

Banking stocks, in particular, were actively traded due to the ongoing recapitalization exercise, which has created some volatility in the sector.

The elevated interest rates in the fixed income market continued to exert downward pressure on the equities market.

Many investors are opting for fixed income securities over stocks, given the higher yields available, thereby reducing demand for equities and contributing to the market’s decline.

Despite the weekly drop, the year-to-date (YtD) stock market return remains relatively strong at 33.30%.

However, the market’s performance this month has decreased by 0.39%, indicating a cooling off from the more robust gains seen earlier in the year.

The lukewarm attitude of investors towards stocks is partly due to broader macroeconomic concerns, including inflationary pressures and currency fluctuations.

These factors have made investors more cautious, preferring to wait for clearer signals from the Q2 corporate earnings season before making significant investment decisions.

Market analysts suggest that the forthcoming Q2 results and corporate actions could potentially provide the much-needed impetus for a market rebound.

However, they caution that persistent macroeconomic challenges could continue to weigh on investor sentiment.

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