Jumia Gains 307 Percent in Three Months
Jumia stock has risen more than 300 percent in the last three months despite the COVID-19 pandemic and a general decline in household income in Nigeria, Africa’s largest economy.
Shares of Nigeria’s first e-commerce company rose from $4 per share on 18th of May, 2020 to $8.95 on July 21, 2020 before more than double that number this week to $16.28 per share after hitting $21 per share on Monday. The Jumia stock has risen by 307 percent since May 18th 2020.
While Jumia fundamentals have not changed in recent months, the forces propelling the stock were largely perception-based as retail investors were predicting that Nigerians and other Africans where the company operates shopped more on Jumia during the COVID-19 lockdown like Amazon, Alibaba and others experienced.
Therefore, retail investors started taking positions on the struggling e-commence company, popularly referred to as Amazon of Africa, ahead of its second-quarter earnings report due next week. They are betting that the company would have experienced a similar upsurge in sales to other global e-commerce companies during the lockdown.
This was after Massimiliano Spalazzi, CEO, Jumia Nigeria, stated that the company sales drop in April, at the beginning of the lockdown, but picked up in May and June with ease of lockdown.
Spalazzi said “We definitely had challenges due to the COVID-19 lockdown, currency devaluation and prices of goods increase in this market. However, with our contactless delivery initiatives, contactless payment via Jumia Pay and partnerships with several companies that produce consumer goods, we saw more new and old customers come on our platform to shop in safety.”
Accordingly, Tolulope George-Yanwah, country manager, Jumia services, said: “Our delivery partners increased year on year (YoY) by 73 percent, delivery associate community saw a 65 percent increase YoY and our pick up points and warehouses increased YoY by 109 percent with over 200 hubs. This shows that our delivery methods have significantly improved with higher volumes of purchases and deliveries made.”
Investors are already pricing in the expected surge in sales for the quarter, forgetting that the e-commerce company was only active in May and June when President Buhari eased the nation’s lockdown.
Also, Jumia is trading below its IPO price of $25.46 per share of April 12, 2019 and record high of $40.21 per share attained on April 26, 2019 when the company was aggressively pushed as Amazon of Africa before Citron Research released fraud statement that eventually plunged its value to $2.33 per share as early as March 20, 2020.
Other factors like disruption in global logistics and supply chain would like impacted Jumia’s potential during the period as most Nigerian vendors on the e-commerce site import goods to sell on the platform. Meaning, without those import goods, Jumia sales would be affected during the lockdown period.
Bank Stocks Top Charts Amid Strong Third Quarter Performance
Bank stocks top both gainers’ and top traded stocks’ charts on Tuesday as investors at the Nigerian Stock Exchange continues to increase their holdings of banks’ stocks amid strong third-quarter financial results.
Zenith Bank led the most traded stocks for a second consecutive day on Tuesday following a declaration of N509 billion gross earnings and N177 billion profit after tax in the first nine months of the year.
Investors traded 71,933,841 shares of Zenith Bank valued at N1,730,151,404.20 during the trading hours of Tuesday.
Transcorp, the only non-bank stock on the top five trades, followed Zenith Bank with 37,172,526 shares worth N32,853,263.27.
Guaranty Trust Bank Plc, Access Bank and United Bank for Africa (UBA) exchanged 30,003,182 units, 29,549,235 units and 29,332,033 units estimated at N1,022,126,997.60, N243,311,726.70 and N236,303,261.20, respectively.
Investors exchanged a total of 365.414 million shares valued at N4.692 billion in 6,325 deals on Tuesday to return the bourse to the green zone after two days of consecutive declines.
The Nigerian Stock Exchange market capitalisation rose by N114 billion from N17.829 trillion it closed on Monday to N17.943 trillion on Tuesday. While the NSE All-Share Index gained 220.82 index points or 0.06 percent to 34,349.56 index points it settled on Tuesday, up from 34,119.74 index points on Monday.
Stanbic IBTC Bank led gainers with N2.8 or 7.08 percent gain to finish the day at N42.35 per share. See the details below.
Insider Dealing: Paul Miyonmide Gbededo, MD Flour Mills, Purchased 1.95 Million Shares in Flour Mills
In a disclosure statement filed with the Nigerian Stock Exchange, the management of Flour Mills of Nigeria Plc said Paul Miyonmide Gbededo, the Group Managing Director, purchased 1,949,839 shares in the company.
In a statement signed by Umolu Joseph, the Company Secretary and Director, Flour Mills of Nigeria, Gbededo bought the 1,948,839 shares at N28 per unit on November 17, 2020.
The Managing Director invested N54,567,492 in Flour Mills of Nigeria Plc in a move that suggested confidence in the future of the company.
The disclosure is in line with the Nigerian Security and Exchange Commission’s new policy on insider dealings. See the transaction details below.
Insider Dealing: Chide Agbapu Buys 1 Million Shares in Fidelity Bank
The management of Fidelity Bank on Friday said Mr. Chidi Agbapu, a non-executive director, bought 1,000,000 shares of Fidelity Bank Plc.
In line with the Nigerian Stock Exchange (NSE) disclosure policy, the lender said Agbapu purchased the shares in two different transactions on November 9, 2020.
According to a statement signed by Ezinwa Unuigboje, Company Secretary, Fidelity Bank, the shares were purchase in two deals of 500,000 units each at N2.75 per share. See the details below.
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