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COVID-19, Recession, Unemployment Have Nothing on Nigerian Stock Exchange in 2020, Leads Global Stocks With 50% Gain

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Nigerian stock market

COVID-19, Recession, Unemployment Have Nothing on Nigerian Stock Exchange in 2020, Leads Global Stocks With 50% Gain

What a year to remember, despite COVID-19, extensive plunged in business activities, high unemployment rate and eventual economic recession, the Nigerian Stock Exchange closed 2020 with a 50.03 percent gain to lead global stock markets as the best performer of 2020.

In a year that started slow and was grounded by COVID-19 for most of the first three quarters, the Nigerian Stock Exchange gained 31.90 percent in the final quarter of 2020 alone and 14.92 percent in the month of December after both the Federal Government and the Central Bank of Nigeria deployed a series of measures to curtail the negative impact of COVID-19 on the economy.

The bourse opened the first two quarters of the year in red with several foreign investors pulling out following numerous negative projections by global experts that COVID-19 will ground business activities in Africa and likely plunged Nigeria’s economy the most given its overexposure to crude oil and reliance on importation for most of its consumption.

However, immediately Federal Government partially lifted restrictions and announced over N3 trillion stimulus package to mitigate the effect of COVID-19, local investors jumped back into the Nigerian Stock Exchange and took it to a record high after the Central Bank of Nigeria lowered the interest rate to 11.5 percent in another move to further stimulate the real sector.

Top executives of listed companies took advantage of the policy to increase the stake across the board as reported by Investors King throughout the year.

Still, activity in the real sector of the economy remained weak as evidenced in the latest manufacturing purchasing index released by the Central Bank of Nigeria. Businesses and investors had abandoned the real sector for the stock market, a move largely blamed on the rising economic uncertainty and plunged in productivity in general.

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.

Stock Market

GameStop Jumps 80 Percent on Friday on Track to Do 300 Percent in January 2021

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GameStop Jumps 80 Percent on Friday on Track to Do 300 Percent in January 2021

The stock price of GameStop, an American video game, consumer electronics, and gaming merchandise retailer headquartered in Grapevine, Texas, United States, jumped by almost 80 percent on Friday following the surge in short-sellers and amateur traders interest in the once struggling video company.

GameStop, whose 5,509 retail stores spread across the United States, Canada, Australia, New Zealand, and Europe as of February 1, 2020, struggled for sales during the lockdown. However, it has found interests in amateur retail traders that are predicting that the gradual reopening of the economy due to COVID-19 vaccine distribution would boost the company’s sales in 2021.

Operating mainly under the GameStop, EB Games, ThinkGeek, and Micromania-Zing brands, GameStop has gained 245 percent in 2021 alone and could do as much as 30 percent today in US premarket trading.

According to Kim Doo-yong, chief executive officer at Must Asset Management, a Korean hedge fund that invested in GameStop and had a 4.7 percent stake in the company as of April 2020, Must Asset management is now less bullish on GameStop due to its volatile and unpredictable nature.

We have become less bullish and turned more neutral on GameStop,” Kim said in an interview with Bloomberg on Monday. “This stock will continue to be very volatile and unpredictable in the short term.”

He, however, said “We are still very positive about the new management at GameStop. We believe Ryan Cohen and his team can repeat the success he realized at Chewy.com.

Ryan Cohen co-founder of Chewy.com that was sold for $3.35 billion in 2017 invested $76 million in GameStop, the amount has now risen by 400 percent to over $380 million, according to a SEC filing.

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Nigerian Stock Exchange

Transcorp Hotel Lists Additional Shares of 2,642,124,511

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Transcorp hotel

Transcorp Hotel Lists Additional Shares of 2,642,124,511

Transcorp Hotel Plc listed additional 2,642,124,511 ordinary shares on the Nigerian Stock Exchange (NSE) last week.

The additional shares listed on The Exchange arose from the Company’s Rights Issue of 2,659,574,468 ordinary shares of 50 kobo each at N3.76 Kobo per share on the basis of seven (7) new ordinary shares for every twenty (20) ordinary shares held as at Monday, 13 July 2020.

The Rights Issue was 99.34% subscribed. With this listing of the additional 2,642,124,511 ordinary shares, the total issued and fully paid up shares of Transcorp Hotel Plc has now increased from 7,600,403,900 to 10,242,528,411 ordinary shares of 50 kobo each.

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Nigerian Stock Exchange

Flour Mills Issues N30 Billion Bond Under N70 Billion Bond Issuance Program

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flour mills posts 184% increase in PAT

Flour Mills Issues N30 Billion Bond Under N70 Billion Bond Issuance Program

Flour Mills Nigeria Plc on Thursday listed N29.8 billion Tranche A and Tranche B Bond, the remaining series of its N70 billion Bond Issuance Programme.

A break down of the listing showed a total volume of 4,890,000, 5 Years 5.5 percent Series 4 (Tranche A) Fixed Rate Senior Unsecured Bond Due 2025 under the N70,000,000,000 Bond Issuance Program; and the 25,000,000, 7 Years 6.25 percent Series 4 (Tranche B) Fixed Rate Senior Unsecured Bond Due 2027 Under the N70,000,000,000 Bond Issuance Program were listed by memorandum on Thursday 21st January 2021.

Speaking on the listing, Mr Olumide Bolumole, the Divisional Head, Listings Business, NSE, said “It has been a positive start to the Nigerian capital market in the new year and we are pleased to commemorate the listing of Flour Mills’ N29.8bn Tranche A and Tranche B Bond Issue, the final series under its N70bn Bond Issuance Programme.

“As is our custom to celebrate significant milestones and accomplishments of our issuers, we also applaud and recognise the contributions of Mr Paul Gbededo who recently retired after 38 years of meritorious service and congratulate Mr (Boye) Olusanya on his appointment as the Group MD/Chief Executive Officer at the NSE, we remain committed to supporting the strategic objectives of our issuers, providing a platform for raising capital even in the toughest of times.”

Olusanya added that “We thank the NSE for hosting us at this virtual Closing Gong ceremony today and we are excited about the role The Exchange is playing in deepening secondary market activities in the Nigerian market in line with international best practice.

“The issuance of the N29.8bn tranche A and B bond coincides happily with the 60th anniversary of Flour Mills Plc and fully utilises the N70bn programme registered in 2018. We will continue to explore opportunities to raise funds via the capital market as this has allowed us to diversify our funding sources whilst playing a critical role in the development of our market.”

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