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Cadbury Nigeria Profit Plunges by 84 Percent in 2020

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Cadbury Nigeria

Cadbury Nigeria Profit Plunges by 84 Percent in 2020

Cadbury Nigeria Plc profit after tax plunged by 84 percent in the 2020 financial year to N172.665 million, down from N1.071 billion in 2019, according to the unaudited financial statements of the company.

The company revenue declined by 10 percent from N39.327 billion filed in 2019 to N35.407 billion in 2020.

Cost of sales improved by 4 percent from N31 billion in 2019 to N29.640 billion in 2020.

Cadbury’s results from operating activities declined by 91 percent from N1.354 billion in 2019 to N119.223 million in 2020.

Cadbury Nigeria Key Financial Highlights for 2020

  • Profit before tax decreased by 84 percent from N1.539 billion achieved in 2019 to N246.665 million 2020.
  • Profit for the year also contracted by 84 percent from N1.071 billion in 2019 to N172.665 million.
  • Share capital remained unchanged at N939.101 million.
  • Total equity declined by 5 percent to N12.877 billion in 2020 from N13.566 billion in 2019 year-on-year.
  • Basic earnings per share also plunged by 84 percent from 57.01 to 9.19 per share.

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

Nigerian Equity Market Gains N294bn Amid Bullish Trend

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Nigerian Exchange Limited - Investors King

The Nigerian equity market continued its bullish momentum on Tuesday, delivering significant gains for investors.

By the close of trading, the market capitalization of the Nigerian Exchange (NGX) surged by N294 billion to settle at N55.65 trillion.

Concurrently, the All-Share Index (ASI) rose by 0.53%, reaching a new high of 98,383.04 basis points.

Surge in Trading Volume

Market participation saw a remarkable increase, with the volume of traded units soaring by 52.49% to 559,608,966 units.

This heightened activity underscored the bullish sentiment that dominated the day’s trading, with the NGX recording 28 gainers compared to 14 losers.

Top Gainers and Losers

Leading the pack of gainers was Dangote Sugar, which appreciated by 10% to close at N42.90 per share. Morison Industries Plc also saw a significant rise, with its stock price increasing by 9.88% to N4.45.

Similarly, the National Salt Company of Nigeria (NASCON) experienced a 9.88% gain, ending the trading session at N37.25 per share.

On the flip side, Sovereign Trust Insurance was among the top losers, shedding 9.52% to close at N0.38 per share. Universal Insurance Plc followed with an 8.33% decline, closing at N0.33, while The Initiate Plc dropped by 7.08% to N1.71.

Sectoral Performance

The bullish activity was reflected across various sectors, with five indexes posting gains. The Banking and Oil and Gas sectors were the standout performers, rising by 2.4% and 1.9%, respectively.

This was largely driven by buy interests in stocks such as United Bank for Africa (UBA), First Bank Holdings, Seplat Energy Plc, and Japaul Gold and Ventures Plc. The Consumer Goods and Insurance indexes also saw gains, increasing by 1.1% and 0.7%, respectively.

Conversely, the Industrial Goods sector was the sole laggard, dipping by 0.20%. Despite this, the overall market sentiment remained positive, buoyed by robust performances in other sectors.

Most Traded Securities

Seplat Energy Plc emerged as the most traded security by value, with N1.60 billion worth of shares exchanged across 51 deals. In terms of volume, Abbey Mortgage Bank led the chart, with 277,527,586 units traded in eight deals.

Outlook

The continued bullish trend in the Nigerian equity market reflects growing investor confidence and optimism.

Analysts suggest that the positive performance could persist if the current market dynamics remain favorable.

However, they also caution that sustained growth will depend on broader economic stability and continued investor interest.

In summary, Tuesday’s trading session was marked by significant gains and heightened trading activity, underscoring the resilience and potential of the Nigerian equity market. As investors capitalize on these bullish trends, the market’s outlook remains cautiously optimistic.

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Nigerian Exchange Limited

Nigerian Exchange Suffers as Foreign Investment Drops 19% in April

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Limited (NGX) experienced a significant downturn in April with foreign investment inflows dropping by 19.14% month-on-month to N42.58 billion from N52.66 billion in March.

This decline reflects the waning confidence of foreign investors in the local equity market, despite the government’s ongoing efforts to stabilize the economy.

According to the Domestic & Foreign Portfolio Investment Report released by NGX, the decrease in foreign inflows has been accompanied by a dramatic rise in foreign outflows, which surged by 88.10% to N78.25 billion from N41.60 billion in March.

This sharp increase underscores the persistent low appetite of foreign investors for Nigerian equities, a trend that has been evident since the beginning of the year.

Foreign outflows have steadily risen from N37.33 billion in January to N40.88 billion in February, indicating a growing concern over the market’s volatility and economic stability.

The combined foreign transactions on the NGX showed an overall increase of 28.19% to N120.83 billion in April, up from N94.26 billion in the previous month.

However, this uptick was not enough to offset the bearish trend that dominated the market, leading to a loss of approximately N3.54 trillion.

Investors have been shifting their focus towards alternative markets that offer better yields and more stability.

Compounding the situation is the impending settlement of $1.30 billion worth of cleared USD/naira-settled non-deliverable forwards (NDF) contracts on the FMDQ securities.

These contracts, set to mature on Wednesday, could put additional pressure on the already strained naira.

Cleared naira-settled NDFs are agreements where parties commit to an exchange rate for a future date without the obligation to deliver the actual US dollar upon settlement.

Instead, the contracts are cash-settled in naira, with the settlement amount determined by the differential between the contract rate and the Nigerian Autonomous Foreign Exchange Fixing rate at maturity.

Financial market analyst Olaide Baanu highlighted the potential impact of this settlement, stating, “The settlement of $1.3 billion implies a cash payment of approximately N1.8 trillion from the Central Bank of Nigeria (CBN) based on the NAFEX rate of around N1,400/dollar. Such a significant cash outflow is likely to lead to further depreciation of the naira beyond the CBN’s target or desired range.”

The CBN may face challenges in managing the liquidity impact of this large payment. Baanu suggested that the central bank might need to intervene in the foreign exchange market to stabilize the naira’s value, possibly through measures to lower the official exchange rate or by issuing promissory notes to prevent excessive naira circulation at once.

Despite efforts to bolster non-oil revenues, the Nigerian economy remains heavily dependent on oil, which accounts for about 90% of the national budget.

The market’s recent performance reflects the urgent need for diversified revenue sources and more robust economic reforms to restore investor confidence and stabilize the currency.

The ongoing economic challenges underscore the importance of effective policy implementation and transparent governance to attract and retain foreign investment.

As the NGX navigates this turbulent period, stakeholders are closely watching for signs of stability and growth that could reignite investor interest in the Nigerian market.

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Nigerian Exchange Limited

Nigerian Stock Market Slips Last Week as CBN Raises Interest Rates to Curb Inflation

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Nigerian Exchange Limited - Investors King

The Nigerian Stock Market dipped last week as the Central Bank of Nigeria (CBN) implemented further tightening measures to address rising inflation.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation both depreciated by 0.52% to close the week at 97,612.51 points and N55.218 trillion, respectively.

This decline in the market coincided with the Monetary Policy Committee (MPC) of the CBN’s decision to hike the policy rate by 150 basis points (bps) to 26.25%.

The committee also retained the cash reserve ratio (CRR) for deposit money banks at 45%, the asymmetric corridor at +100bps/-300bps, and the liquidity ratio at 30%.

“The market remains under pressure as investors pursue safety in the fixed income space. However, given the strong sell-side action in the banking space, we anticipate some buy-side action in the coming week as traders seek to take advantage of some stocks that have been beaten down in recent sessions,” noted analysts from Lagos-based Vetiva Research in their May 24 report.

Despite the overall market downturn, certain sectors showed resilience.

Indices such as NGX MERI Value, NGX Consumer Goods, NGX Oil and Gas, NGX Lotus II, and NGX Industrial Goods saw gains of 1.74%, 0.31%, 0.72%, 0.44%, and 0.19%, respectively.

The NGX ASeM index, however, closed flat.

A closer look at the week’s trading activities revealed that twenty-four equities appreciated in price, down from twenty-eight in the previous week.

Conversely, fifty-three equities saw a decline in price, an increase from fifty-one in the preceding week, while seventy-seven equities remained unchanged, slightly up from seventy-six.

The financial services industry led the trading activity with 1.577 billion shares valued at N30.359 billion traded in 20,697 deals, accounting for 79.41% and 74.56% of the total equity turnover volume and value, respectively.

The conglomerates industry followed with 125.342 million shares worth N1.387 billion in 2,283 deals.

The consumer goods industry also recorded significant activity, with a turnover of 77.327 million shares worth N2.446 billion in 4,916 deals.

Among individual equities, Ecobank Transnational Incorporated Plc, Access Holdings Plc, and United Bank for Africa Plc were the top three in terms of trading volume, accounting for 1.006 billion shares worth N20.115 billion in 6,849 deals.

This represented 50.67% and 49.40% of the total equity turnover volume and value, respectively.

Also, 5,340 units of exchange-traded products valued at N2.350 million were traded in 111 deals, compared to 4,103 units valued at N2.429 million in 110 deals the previous week.

The bond market also saw significant activity, with 82,778 units valued at N80.570 million traded in 18 deals, compared to 9,282 units valued at N8.945 million traded in 24 deals the preceding week.

The MPC’s decision to raise interest rates is part of a broader strategy to rein in inflation and stabilize the economy.

However, the immediate impact on the stock market has been negative, as investors seek safer investments in the fixed income space.

Market participants will be closely watching the coming weeks for potential buy-side opportunities and further economic indicators that could influence trading strategies.

As the Nigerian stock market navigates these turbulent times, the actions of the CBN and global economic conditions will continue to play pivotal roles in shaping market dynamics.

Investors are advised to stay informed and consider the long-term implications of these policy decisions on their portfolios.

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