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Jumia Stock Jumps More than 300% in Three Months

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Jumia - Investors King

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.

Jumia stockWhile 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.

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.

Nigerian Stock Exchange

Stocks on Nigerian Exchange Limited Sustains Gain on Tuesday

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Stock Bull - Investors King

Listed stocks on the Nigerian Exchange Limited gained N36 billion on Tuesday to sustain Monday’s positive momentum.

The bourse All-Share Index rose by 0.18 percent from 39,312.74 index points on Monday to close at 39,382.96 index points on Tuesday. While the market value of listed equities expanded by N36 billion to settle at N20.527 trillion, up from N20.491 trillion recorded on Monday.

Investors traded 296.596 million shares valued at N3.362 billion in 4,265 transactions during the trading hours of Tuesday.

Meyer led gainers with N0.05 or 9.62 percent gain to close at N0.57 per share. This was followed by Presco with N6.90 or 9.58 percent gain as shown below.

Stock Market Snapshot

ASI 39,382.96
DEALS 4,265.00
VOLUME 296,596,623.00
VALUE N 3,361,573,907.37
EQUITY CAP N 20,527,328,320,996.84
BOND CAP N 17,216,586,380,738.50
ETF CAP N 18,261,586,163.62

Top Gainers

Symbols Last Close Current Change %Change
MEYER N0.52 N0.57 0.05 9.62%
PRESCO N72.00 N78.90 6.90 9.58%
UAC-PROP N0.76 N0.83 0.07 9.21%
AFRIPRUD N6.00 N6.55 0.55 9.17%
UNITYBNK N0.55 N0.60 0.05 9.09%

Top Losers

Symbols Last Close Current Change %Change
REGALINS N0.34 N0.31 -0.03 -8.82%
HONYFLOUR N1.20 N1.13 -0.07 -5.83%
CUTIX N2.21 N2.10 -0.11 -4.98%
UCAP N6.00 N5.76 -0.24 -4.00%
WAPIC N0.53 N0.51 -0.02 -3.77%

Top Trades

Symbols Volume Value
ACCESS 58,558,705.00 N494,147,223.85
UACN 38,274,061.00 N394,222,603.70
FIDELITYBK 27,150,533.00 N62,355,969.20
ZENITHBANK 26,421,735.00 N609,738,886.60
TRANSCORP 15,626,067.00 N14,179,618.10

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Stock Market

Global Sell-off Should be a Reality Check for Investors: deVere CEO

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Global Sell off - Investors King

Concerns about inflation that are rattling global stock markets on Tuesday should be used as a reality check for investors, says the CEO of one of the world’s largest financial advisory and fintech organizations.

The observation from Nigel Green, chief executive and founder of deVere Group comes as the pan-European Stoxx 600 index dropped 2.3%, with London’s FTSE 100 falling 2.4%.

Losses in Europe follow those in the Asia Pacific region. Hong Kong’s Hang Seng closed more than 2% lower and Japan’s Nikkei 225 ended the Tokyo trading session having shed more than 3%.

Meanwhile, U.S. futures are down across the board ahead of the opening bell in New York.

Mr Green says: “It is to be expected that there would be a jump in prices and supply shortages, in goods like chips and some commodities, as economies re-open and pent-up demand is unleashed by households, businesses and entire industries.

“We’re at a point of major readjustment following an unprecedented economic shock and this is fuelling concerns that rising inflation will trigger central banks to tighten monetary policy which will hit asset prices.

“It is this scenario that is rattling markets and triggering a global sell-off.”

He continues: “Tech shares are bearing the brunt of the sell-off, but this will also be used as an opportunity.

“With our daily lives becoming ever more digitalized – and at a staggering pace – tech will remain one of the mega-trends for investors for the foreseeable future.

“Savvy investors will be drawn to the massive growth that tech offers and this sell-off will used as a buying opportunity.  Nobody seriously believes the future isn’t online.”

Therefore, says Mr Green, investors would be wise to be “selective” about the sell-off.

“With some of the heat being taken out of the markets, with some stocks way too high, they are likely to – perhaps more judiciously than before – move to capitalize on this dip.”

The deVere CEO concludes: “Of course, I don’t have a crystal ball, but history shows that stock markets typically rise over the longer-term.

“Therefore, in the near future, I predict many investors will be seeking out the buying opportunities that exist.”

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Nigerian Stock Exchange

Investors Jump on Union Bank of Nigeria’s Shares Amid Acquisition Rumour

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Union bank - Investors King

Shares of Union Bank of Nigeria Plc, a leading financial institution in Nigeria, rose by 50 kobo or 9.26 percent on Monday following reports that Atlas Mara Limited, a 49.7 percent owner in the bank has been talking to investors to sell its stake.

Investors King had reported that Bloomberg sources claimed Atlas Mara Limited, a London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond is in talks with Zenith Bank, Access Bank and other investors across Africa to sell its holding in the bank.

Since the report became public investors have been acquiring shares of Union Bank in case Zenith Bank or Access Bank, one of the leading banks in the country, acquire it. Even the bank’s CEO, Godson Chukwuemeka Okonkwo, purchased an additional 2,431,917 ordinary shares of the bank on Thursday, according to the bank’s latest disclosure filing.

Union Bank of Nigeria was the third-highest gainer on Monday.

The Nigerian Exchange Limited gained N59.4 billion on Monday to close at N20.491 trillion on Monday.

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