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Robinhood Users Call Out Company Over Refusal to Pay Out Profits on SVB Stock



Robinhood-Investors King

American financial services company that facilitates commission-free trading of stocks and exchange-traded funds via mobile app Robinhood has been called out by users over refusal to pay out profits made on Silicon Valley Bank stock (SBNY) following the collapse of the bank.

Several Robinhood users who predicted a possible slump in the bank stock price, swiftly purchased put options on the stocks before it collapsed.

The problem is, according to users of the trading app, Robinhood isn’t allowing them to sell their contracts or get paid, while a slew of the contracts is set to expire on Friday which has left them frustrated.

Several users of the platform who have taken to Twitter to express their grievances disclosed that their trades on SBNY stock were halted by the firm after it disclosed that they won’t be able to cash out their profit as the stock is no longer trading.

Users have continued to ask the all-important question of why they were allowed to buy put contracts on stocks they didn’t own in the first place if that was a condition for getting paid if a situation like this played out. On the request to know if the stock is going to trade again, the company revealed that it doesn’t know yet.

A Twitter user @OmniBubblebear, took to his Twitter handle to share the message he received from Robinhood after trading on SBNY stock, the message reads,

“Per your request, I’ve included some additional details about your SBNY puts. As discussed, you are currently unable to exercise the long puts because you currently do not hold shares of SBNY. As you may know, Robinhood does not allow short positions.

“I also looked into the possibility of transferring the position out of Robinhood, however, ACAT transfers take 5-7 business days to complete, and your options expire on 03/17/2023. There is no way for us to expedite a transfer, so the contracts would most likely expire before the transfer completes.

“I know this is not the outcome you were expecting, but I hope I was able to clarify why we are unable to exercise your long puts. If you have any additional questions regarding the stock or the halt, I recommend reaching out to SBNY investor relations.”

Following the incessant complaints that have seen users call out the company, Robinhood CEO Vlad Tenev took to his Twitter handle to tweet that the firm was working to resolve the issue as soon as possible.

Investors King understands that about three months ago, Robinhood was hit with a huge fine of $70 million for misleading customers and encouraging potentially ruinous trades. The app reportedly used push alerts that encouraged users to make trades that could potentially put them in debt.

The company lost users after federal regulators fined them for several misleading practices. In a bid to lure users back on its platform, it introduced fee-free individual retirement accounts aimed at gig workers, who don’t always have access to retirement savings plans. 

According to the Wall Street Journal, roughly 80% of Robinhood’s customers are millennials and the average customer age is just 26. Robinhood typically only supports trading stocks and ETFs listed on the Nasdaq and New York Stock Exchange, and normally does not support over-the-counter securities such as those traded on OTC Markets.

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Nigerian Exchange Limited

Nigerian Stock Market Dips as Uncertainty Surrounding Nigerian Economy Deepens Amid Cash Crunch



stock bear - Investors King

The Nigerian stock exchange extended its decline by another N13 billion last week as a cash crunch amid high-interest rates dragged on economic activity.

The Central Bank of Nigeria (CBN) led monetary policy committee raised interest rates by 50 basis points to 18% despite Nigeria’s cash crisis, high unemployment rate and weak economic activity. The committee hinged its decision on the rising inflation rate and the need to lure foreign investors into the economy given that developed economies were doing the same.

During the week, stock investors exchanged 1.689 billion shares worth N11.066 billion in 14,019 deals, in contrast to a total of 853.745 million shares valued at N11.841 billion that exchanged hands in 18,543 deals in the previous week.

Breaking down key sectors, the healthcare industry led the activity chart with 1.086 billion shares valued at N1.627 billion traded in 267 deals. Therefore, contributed 64.32% and 14.70% to the total equity turnover volume and value, respectively.

The financial services industry followed with 379.556 million shares worth N4.547 billion in 6,711 deals. In third place was the conglomerates industry with a turnover of 89.526 million shares worth N131.231 million in 534 deals.

Neimeth International Pharmaceuticals Plc, Transnational Corporation Plc and United Bank for Africa Plc were the three most traded equities accounting for a combined 1.248 billion shares worth N2.347 billion that exchanged hands in 1,102 deals and contributed 73.89% and 21.21% to the total equity turnover volume and value, respectively.

The market value of listed equities decreased by N13 billion from N29.916 trillion recorded in the previous week to N29.903 trillion last week.

The NGX All-Share Index 0.04% or 22.86 index points to close the week at 54,892.53 index points, down from the 54,915.39 index points it closed in the previous week.

All other indices finished higher with the exception of NGX Main Board, NGX 30, NGX Insurance, NGX MERI Growth, NGX Consumer Goods and NGX Industrial Goods which depreciated by 0.30%, 0.16%, 0.53%, 0.58%, 0.74%, and 0.49% respectively while the NGX ASeM, NGX Oil and Gas, NGX Growth and NGX Sovereign Bond indices closed flat.

Twenty-eight equities appreciated in price during the week higher than nineteen equities in the previous week. Twenty-seven equities depreciated in price lower than forty-seven in the previous week, while one hundred and two equities remained unchanged, higher than ninety-one equities recorded in the previous week.


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Another Decent Bond Auction for the DMO



Naira Dollar Exchange Rate - Investors King

The DMO held its monthly auction of FGN bonds on Monday (20 March ’23). It offered N360bn (USD780.1m) but raised N563.2bn (USD1.2bn) through re-openings of the 13.98% FGN FEB 2028, 12.50% FGN APR 2032, 16.25% FGN APR 2037, and 14.80% FGN APR 2049 FGN bonds.

The participation level (demand) at this auction declined by -22.6% to N808.4bn (USD1.7bn) compared with N991.9bn (USD2.1bn) recorded in February ’23. The bids for the 5, 9, 15, and 27-year benchmarks were allotted at the marginal rates of 14.00% (previously 13.90%), 14.75% (previously 14.90%), 15.20% (previously 15.90%), and 15.75% (previously 16.00%) respectively. Bid-to-cover stood at 1.4x

YTD the DMO has now raised NGN1.9trn at its bond auctions, exceeding its borrowing target (via FGN bonds) by 58.3% in Q1 ’23. It is clearly on track pro rata to meet the target for H1 2023.

The MPC/CBN raised the policy rate by 50bps to 18% at its latest meeting held in March. Further tightening is expected to offset the upward risk in price development and narrow the real interest rate gap. There was a slight uptick in the average FGN bond yield following the 50bps rate hike. We note that MPR – Inflation is currently at -3.9%.

The domestic institutions are still the core buyers of the bonds, which accounted for 61.5% of the assets under management of the PFAs at end-December ‘22. Some foreign portfolio investors (FPIs) outside the payments pipeline may be tempted back into the market by a little more retracement. More likely in our view, the domestic institutions will again make the running and the FPIs will generally stick with less complicated trades with similar (or better) returns elsewhere.

Looking ahead we expect a small boost to system liquidity due to an FGN bond maturity, NTB maturity, bond coupon payments and an OMO maturity in April and May. These maturities and coupon payments collectively amount to N1.45trn. A slight moderation in the avenge yield of fixed income instruments is likely.

In H2 2023 liquidity is expected to reduce while domestic borrowing increases, potentially resulting in further upticks in yields. However, the level of system liquidity largely impacted by items such as auctions, CRR debits/refunds, bond/NTB maturities and coupon payments would influence the movement in yields.

Over the next month, we see the mid-curve FGN bond yields around 13.7% – 14.9% and yields at the longer end of the curve between 13.5% – 15.8%.

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Nigerian Exchange Limited

Nigerian Stock Exchange Extends Gain on Wednesday, Posts 0.06% Gain



stock market - Investors King

The Nigerian Exchange Limited (NGX) closed in the green on Wednesday after posting a N10 billion gain on Tuesday despite the increase in interest rates to 18% and the uncertainty surrounding the cash crunch.

On Wednesday, stock investors traded 134,150,558 stocks worth N1.330 billion in 2,479 transactions during the trading hours of Wednesday. Transcorp emerged as the most traded stock with 28,122,091 shares valued at N35,922,896.78. This was followed by UBA’s 21,231,993 shares worth N170,415,095.30.

Breaking down each sector’s performance, the bank sector shed 1 basis point with Wema Bank and Zenith bank closing in the red.

Consumer goods lost 12 basis points as Honey Flour and Vitaform post -2.22% and -1.06% decline. As expected, the oil and gas sector closed flat same as the industrial sector.

The exchange year-to-date return extended to 7.19% despite 14 stocks closing in the red against 9 stocks that posted gains.

The market value of listed equities rose to N29.927 trillion, representing an N18 billion gain from the N29.909 trillion it closed on Tuesday.

NGX All-Share Index grew by 0.06% from 54,906.65 index points on Tuesday to 54,936.11 index points on Wednesday. See other details below.

Top Five Gainers 

Symbols Last Close Current Change %Change
WAPIC N 0.41 N 0.42 0.01 2.44 %
GTCO N 24.60 N 25.20 0.60 2.44 %
LINKASSURE N 0.45 N 0.46 0.01 2.22 %
LASACO N 0.98 N 1.00 0.02 2.04 %
TRANSCORP N 1.28 N 1.30 0.02 1.56 %

Top Five Losers

Symbols Last Close Current Change %Change
NCR N 2.89 N 2.61 -0.28 -9.69 %
FTNCOCOA N 0.29 N 0.27 -0.02 -6.90 %
JAPAULGOLD N 0.30 N 0.28 -0.02 -6.67 %
CUTIX N 2.22 N 2.11 -0.11 -4.95 %
CHIPLC N 0.65 N 0.62 -0.03 -4.62 %

Top Five Trades

Symbols Volume Value
TRANSCORP 28122091.00 35922896.78
UBA 21231993.00 170415095.30
COURTVILLE 19127715.00 8608085.67
GTCO 13551801.00 336904357.15
FBNH 8126325.00 88997548.25

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